The quantifiable income or cost avoidance associated

This preview shows page 17 - 18 out of 18 pages.

The quantifiable income or cost avoidance associated with the project investment. The continuing costs (such as maintenance and support) required to employ the investment resources.
Image of page 17

Subscribe to view the full document.

Documentation for Return on Investment Analysis EBITDA Earnings before Depreciation, Interest, Taxes, and Amortization Depreciation Pre-Tax Earnings EBITDA minus Depreciation Tax* Estimated Income Taxes After Tax Earnings Pre-Tax Earnings minus Tax Non Cash Items Projected expenses that do not require cash. Cash Flows from Operations Cash Flows from Investments The net amount of cash receipts and payments for obtaining the investment. Net Incremental Cash Flow NPV Discounted Payback Period IRR Average EBITDA ROI After Tax Earnings plus Non Cash Items: the net amount of cash receipts and payments of the operations of the investment. Cash Flows from Operations plus Cash Flows from Investments: total cash flows of the project. Discounted Incremental Cash Flow The Net Incremental Cash Flow amount factored for the time period at the Discount Rate in order to approximate present day dollars. Net Present Value: the sum of the cash flows factored over the designated time period at the Discount Rate. The time period in years required to recover the initial investment with positive cash flows. Internal Rate of Return: the rate of return for the series of Net Incremental Cash Flows The average of the EBITDA amounts divided by the Present Value of Total Investment.
Image of page 18

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern