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Measures the time needed for an investment to generate cash flows sufficient to recover the initial outlay. Typically used as a preliminary assessment of project liquidity risk.

Calculates the present value of future cash flows minus the initial investment, using a discount rate. It's used to assess profitability by considering the time value of money.

Estimates the profitability of potential investments by calculating the discount rate that makes the net present value (NPV) of cash flows equal to zero. It's widely used for comparing different investment opportunities.

Also known as the benefit-cost ratio, it's the ratio of the present value of future cash flows generated by a project to the initial investment. It's used to rank projects when capital is constrained.

Calculates the return on investment by dividing the average annual profit by the initial investment cost. Typically used for quickly comparing the profitability of different investment options without considering the time value of money.

Similar to Payback Period, but it adjusts the future cash flows for the time value of money by discounting them. This technique is used when the time value of money is important for liquidity analysis.

Addresses the problem of multiple IRRs by assuming reinvestment at the firm's cost of capital, rather than at IRR. This technique is used to provide a more accurate reflection of a project's profitability and risk.

Measures the increase in profit that an investment is expected to generate, divided by the initial cost of the investment. Often used as a basic indicator of an investment’s profitability without factoring in the time value of money.

A technique that applies financial options theory to real investment opportunities, accounting for the flexibility and choices available to management. It's especially used for investments with high uncertainty and irreversibility.

Calculates the volume of production or sales at which the total revenues equal total costs. It's used to determine the viability of a project by finding the point where there is neither profit nor loss.

Measures a company's financial performance based on the residual wealth calculated by deducting the cost of capital from its operating profit. Commonly used to assess the value a company generates from its capital investment.

Compares the gain or loss from an investment relative to its cost, typically expressed as a percentage. This straightforward metric is often used for a quick assessment of an investment’s efficiency.

A systematic approach to estimating the strengths and weaknesses of alternatives, by quantifying in monetary terms the benefits of an action minus the costs. It's often used in project management and policy decision-making.

Calculates return on capital by adjusting for the risk taken. It is used to determine if the return is sufficient to compensate for the risk of investment and inform risk management and investment decisions.

A technique used to study how various sources of uncertainty in a financial model impact the model's overall outcome. It's particularly useful when evaluating investments having significant uncertainty in project variables.

Involves creating and analyzing different future states of a project or investment by considering various possible outcomes. It helps investors understand the potential impacts of different scenarios on their investment.

Uses random sampling and statistical modeling to estimate mathematical functions and mimic the operation of complex systems. Ideal for investment appraisal in scenarios where there is significant uncertainty and numerous inputs.

A model that describes the relationship between systemic risk and expected return, mainly used to calculate a theoretically required rate of return for an investment.

Calculates the present value of expected future cash flows using a discount rate. It's a fundamental analysis method used to determine the value of an investment based on its expected future cash flows.