Home › IB Diploma Business Studies › Chapter 20
IB Diploma · Business Studies · Chapter 20
Ch 20 3.8 Investment appraisal: complete notes
Neat, exam-ready notebook-style notes for Ch 20 3.8 Investment appraisal, following the IB Diploma syllabus, SL and HL. This chapter is part of the complete Business Management Notes for IB Diploma Students (SL and HL): All 36 Topics.
Free preview: Ch 20 3.8 Investment appraisal notes
A quick look at the chapter from our IB Diploma Business Studies notes. The full chapter notes have the detailed explanations, diagrams and practice questions with answers.
Topics in this chapter
- What you must be able to do
- Why firms appraise investments AO3
- What information is needed?
- The three methods in this topic
- Payback period AO3 AO4
- Payback on a graph, and how useful it is AO3
- Average rate of return (ARR) AO3 AO4
- Net present value (NPV) AO3 AO4
- Using NPV to compare projects AO3 AO4
- Which method when?
- Qualitative factors and reaching a recommendation AO3
- Business management tools in this topic
“I can” checklist: what you must be able to do
- I can explain why firms appraise capital investments and what data they need.
- I can calculate payback for even and uneven cash flows, in years and months.
- I can calculate average rate of return using the guide's formula.
- I can evaluate payback and ARR, giving advantages, limitations and context.
- HL: I can explain the time value of money and calculate NPV using a discount table.
- HL: I can show how a change in the discount rate changes NPV and the ranking of projects.
- I can combine quantitative results and qualitative factors to recommend an investment and justify it.
- I can use descriptive statistics and SWOT to support an investment decision.
What is inside the full chapter notes
- Concept notes with 9 worked examples (all numbers computed)
- A cumulative cash flow graph and the discount table
- Tool boxes (descriptive statistics, SWOT, decision criteria)
- Common mistakes and a "How to score" command-term box
- 12 Quick-check questions A-D, explained
- Paper 1 style case with mark scheme and a 10-mark question
- Paper 2 style quantitative question with HL extension
- Quick reference and "I can" checklist
What you get in the pack
- All 36 topics of IB Diploma Business Management for students taking Standard Level or Higher Level (first assessment 2024): what a business is, business entities, objectives, stakeholders, growth, multinationals, human resource management, organizational structure, leadership, motivation, culture, communication, industrial relations, sources of finance, costs and revenues, final accounts, ratio analysis, cash flow, investment appraisal, budgets, marketing planning, sales forecasting, market research, the seven Ps, international marketing, operations methods, lean production, location, break-even analysis, crisis management, research and development, management information systems
- Every syllabus statement covered in order, each marked SL or HL, with clear notes, tables and diagrams drawn for these notes
- Worked examples in every topic: calculations and model answers that show how to earn the marks
- Quick-check multiple-choice questions with explained answers, plus original Paper 1 (case study), Paper 2 (quantitative) and, for HL, Paper 3 (social enterprise) style questions with full mark schemes (no past-paper reprints)
- Common mistakes and a how-to-score command-term guide for every topic
- Quick-reference sheet and an "I can" checklist at the end of every topic
- Colour PDF and a black and white copy of every chapter for printing
- Independent notes for IB Diploma students; not endorsed by or affiliated with the International Baccalaureate Organization (IBO)
All chapters in this pack
- Ch 1 1.1-1.2 The nature of business and types of business entity
- Ch 2 1.3 Business objectives
- Ch 3 1.4 Stakeholders
- Ch 4 1.5 Growth and evolution
- Ch 5 1.6 Multinational companies (MNCs)
- Ch 6 2.1 Introduction to human resource management
- Ch 7 2.2 Organizational structure
- Ch 8 2.3 Leadership and management
- Ch 9 2.4 Motivation and demotivation
- Ch 10 2.5 Organizational (corporate) culture (HL)
- Ch 11 2.6 Communication
- Ch 12 2.7 Industrial and employee relations (HL)
- Ch 13 3.1 Introduction to finance
- Ch 14 3.2 Sources of finance
- Ch 15 3.3 Costs and revenues
- Ch 16 3.4 Final accounts
- Ch 17 3.5 Profitability and liquidity ratio analysis
- Ch 18 3.6 Efficiency ratio analysis (HL)
- Ch 19 3.7 Cash flow
- Ch 20 3.8 Investment appraisal
- Ch 21 3.9 Budgets (HL)
- Ch 22 4.1 Introduction to marketing
- Ch 23 4.2 Marketing planning
- Ch 24 4.3 Sales forecasting (HL)
- Ch 25 4.4 Market research
- Ch 26 4.5 The seven Ps of the marketing mix
- Ch 27 4.6 International marketing (HL)
- Ch 28 5.1 Introduction to operations management
- Ch 29 5.2 Operations methods
- Ch 30 5.3 Lean production and quality management (HL)
- Ch 31 5.4 Location
- Ch 32 5.5 Break-even analysis
- Ch 33 5.6 Production planning (HL)
- Ch 34 5.7 Crisis management and contingency planning (HL)
- Ch 35 5.8 Research and development (HL)
- Ch 36 5.9 Management information systems (HL)