First of all, what do we mean by a "major purchase?" Among financial types (like your banker or accountant), the main consideration is usually that the item or project will have a service period of ... |
The first step in deciding whether to make a major purchase or take on a major project is to really sit down and think about what you're trying to accomplish. What are the benefits that will flow ... |
Once you've identified what your major purchase or project should accomplish for you and fleshed out your requirements for the project, the next step is to ... |
If you want to finance your major purchase or project with a bank loan, your lender is likely to want to see a cash flow budget showing the effect of the ... |
At the simplest level of analysis, you'll want to make sure that the total costs of any major project you undertake are less than the |
The payback method is the simplest way of looking at one or more major project ideas. It tells you how long it will take to earn back the money you'll spend on the project. The formula is: |
A fairly simple way of gauging your return on an investment in a major project or purchase is the accounting rate of return (ARR). The formula is: |
The net present value method (NPV) of evaluating a major project allows you to consider the time value of money. Essentially, it helps you find the ... |
How can you quickly estimate your cost of borrowing, which is used as the "discount rate," for purposes of analyzing a major purchase decision? |
The internal rate of return (IRR) method of analyzing a major purchase or project allows you to consider the time value of money. Essentially, it allows ... |
