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Unit 3.8

Horizontales
The purchase of assets with the potential to yield future financial benefits.
A financial decision-making tool that helps managers to calculate whether certain investment projects should be undertaken based mainly on quantitative techniques.
Calculates the average annual profit of an investment project, expressed as a percentage of the initial sum of money invested.
Verticales
Uses a discount factor to reduce the value of money received in future years because money loses its value over time.
Calculates the total discounted net cash flows minus the initial cost of an investment project.
An investment appraisal technique that calculates the length of time needed to recoup the initial expenditure on an investment