Investment appraisal
KS5 · 40 minutes · Use payback, ARR and NPV.
Answer by: Type. You can change method or take a break at any time.
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Our learning goal
Use payback, ARR and NPV.
Your turn: Choose one thing you would like to understand by the end.
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My lesson notes & project
Full teaching script
- Today: Investment appraisal. Our goal: Use payback, ARR and NPV.
- Take one idea at a time. Pause after each sentence; ask for repetition whenever you need it.
- Payback is how long until you get your money back — simple, ignores time value. ARR is average profit over investment. NPV discounts every future cash flow to today's value; a positive NPV means the project beats the discount rate. NPV is the only one that respects the cost of time.
- Together: choose one example from the explanation and show how it works. What do you notice?
- Your turn: Appraise a £50k machine over five years by all three methods.
- Reflect: what made sense, and what would you like explained differently?
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