DDB (double declining balance)
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sometimes you dont reach salvage value when you use this function.
useful life of 10 years results in a rate of 1/10 = 0.1
DDB doubles this rate to 0.2
period 1 = 10,000*0.2 = 2000
, period 2 = (10,000-2000)*0.2 = 1,600
(graph is same as DB method)
Primary Activities
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inbound logistics, operations, outbound logistics, marketing and sales,
service. Directly involved in developing and selling a product
IRR analysis
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Generally speaking, the higher a project's internal rate of return, the more
desirable it is to undertake the project. As such, IRR can be used to rank
several prospective projects a firm is considering.
PMT( )
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used determine periodic payments for loans
Simulation and Risk Analysis
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a. Process of modeling a situation under uncertainty to predict the
statistical probability of potential outcomes
b. Provides a model to account for uncertainty in a customized and
individualistic way
c. A good method when a model has many assumptions, and it is not
possible to get an optimal answer
Depreciation
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systematic and rational process of distributing the cost of tangible assets
(buildings, vehicles, equipment etc.) over the life of assets.
Sensitivity Analysis
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a. Used to evaluate the impact of a variable on the outcome of a model
i. If a change in the value of a variable causes a significant change to the
outcome, then the model is sensitive to that variable
ii. Can be used in determining risk factors when making a choice and
developing priorities in risk mitigation
Phases of Decision-Making
Give this one a try later!
sometimes you dont reach salvage value when you use this function.
useful life of 10 years results in a rate of 1/10 = 0.1
DDB doubles this rate to 0.2
period 1 = 10,000*0.2 = 2000
, period 2 = (10,000-2000)*0.2 = 1,600
(graph is same as DB method)
Primary Activities
Give this one a try later!
inbound logistics, operations, outbound logistics, marketing and sales,
service. Directly involved in developing and selling a product
IRR analysis
Give this one a try later!
Generally speaking, the higher a project's internal rate of return, the more
desirable it is to undertake the project. As such, IRR can be used to rank
several prospective projects a firm is considering.
PMT( )
Give this one a try later!
used determine periodic payments for loans
Simulation and Risk Analysis
, Give this one a try later!
a. Process of modeling a situation under uncertainty to predict the
statistical probability of potential outcomes
b. Provides a model to account for uncertainty in a customized and
individualistic way
c. A good method when a model has many assumptions, and it is not
possible to get an optimal answer
Depreciation
Give this one a try later!
systematic and rational process of distributing the cost of tangible assets
(buildings, vehicles, equipment etc.) over the life of assets.
Sensitivity Analysis
Give this one a try later!
a. Used to evaluate the impact of a variable on the outcome of a model
i. If a change in the value of a variable causes a significant change to the
outcome, then the model is sensitive to that variable
ii. Can be used in determining risk factors when making a choice and
developing priorities in risk mitigation
Phases of Decision-Making
