Investment Appraisal Worksheet Generator
Payback period, average rate of return and net present value. No AI, no credits.
Grades 8 – 12No account needed
Payback period, average rate of return and net present value with a stated discount rate, and cash flow tables. Every answer is computed by code. No AI, so it never uses a generation credit.
What students practice
- Business
- Investment appraisal
- NPV
Live sample sheet
No account needed to view and print.
Name: ____________________Date: ____________
Investment Appraisal
1. An investment of $321,000 generates $50,000 per year. Calculate the payback period.
2. An investment of $434,000 with scrap value $101,533 generates total profit of $115,000 over 3 years. Calculate the average rate of return (ARR).
3. An investment of $173,000 generates $66,000 per year. Calculate the payback period.
4. An investment of $440,000 with scrap value $85,564 generates total profit of $179,000 over 3 years. Calculate the average rate of return (ARR).
5. An investment of $386,000 generates $37,000 per year. Calculate the payback period.
6. An investment of $138,000 with scrap value $27,620 generates total profit of $130,000 over 5 years. Calculate the average rate of return (ARR).
7. An investment of $51,000 generates $52,000 per year. Calculate the payback period.
8. An investment of $427,000 with scrap value $47,073 generates total profit of $25,000 over 5 years. Calculate the average rate of return (ARR).
9. An investment of $170,000 generates $15,000 per year. Calculate the payback period.
10. An investment of $133,000 with scrap value $34,142 generates total profit of $24,000 over 5 years. Calculate the average rate of return (ARR).
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Answer Key — Investment Appraisal
1. An investment of $321,000 generates $50,000 per year. Calculate the payback period.
Solution:
Year 6: $300,000 recovered
Remaining: $321,000 - $300,000 = $21,000
Fraction of year 7: $21,000 / $50,000 = 0.42
Payback = 6 + 0.42 = 6.42 years
Answer: 6.42 years
2. An investment of $434,000 with scrap value $101,533 generates total profit of $115,000 over 3 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $115,000 / 3 = $38,333
Average investment = ($434,000 + $101,533) / 2 = $267,766.5
ARR = ($38,333 / $267,766.5) × 100 = 14.3%
Answer: 14.3%
3. An investment of $173,000 generates $66,000 per year. Calculate the payback period.
Solution:
Year 2: $132,000 recovered
Remaining: $173,000 - $132,000 = $41,000
Fraction of year 3: $41,000 / $66,000 = 0.62
Payback = 2 + 0.62 = 2.62 years
Answer: 2.62 years
4. An investment of $440,000 with scrap value $85,564 generates total profit of $179,000 over 3 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $179,000 / 3 = $59,667
Average investment = ($440,000 + $85,564) / 2 = $262,782
ARR = ($59,667 / $262,782) × 100 = 22.7%
Answer: 22.7%
5. An investment of $386,000 generates $37,000 per year. Calculate the payback period.
Solution:
Year 10: $370,000 recovered
Remaining: $386,000 - $370,000 = $16,000
Fraction of year 11: $16,000 / $37,000 = 0.43
Payback = 10 + 0.43 = 10.43 years
Answer: 10.43 years
6. An investment of $138,000 with scrap value $27,620 generates total profit of $130,000 over 5 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $130,000 / 5 = $26,000
Average investment = ($138,000 + $27,620) / 2 = $82,810
ARR = ($26,000 / $82,810) × 100 = 31.4%
Answer: 31.4%
7. An investment of $51,000 generates $52,000 per year. Calculate the payback period.
Solution:
Year 0: $0 recovered
Remaining: $51,000 - $0 = $51,000
Fraction of year 1: $51,000 / $52,000 = 0.98
Payback = 0 + 0.98 = 0.98 years
Answer: 0.98 years
8. An investment of $427,000 with scrap value $47,073 generates total profit of $25,000 over 5 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $25,000 / 5 = $5,000
Average investment = ($427,000 + $47,073) / 2 = $237,036.5
ARR = ($5,000 / $237,036.5) × 100 = 2.1%
Answer: 2.1%
9. An investment of $170,000 generates $15,000 per year. Calculate the payback period.
Solution:
Year 11: $165,000 recovered
Remaining: $170,000 - $165,000 = $5,000
Fraction of year 12: $5,000 / $15,000 = 0.33
Payback = 11 + 0.33 = 11.33 years
Answer: 11.33 years
10. An investment of $133,000 with scrap value $34,142 generates total profit of $24,000 over 5 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $24,000 / 5 = $4,800
Average investment = ($133,000 + $34,142) / 2 = $83,571
ARR = ($4,800 / $83,571) × 100 = 5.7%
Answer: 5.7%
Answers computed by code. No AI, no credits.
Assumptions and Conventions
Assumptions:
- Payback period = time for cash inflows to equal the initial investment.
- ARR = (Average annual profit / Average investment) × 100.
- NPV = Sum of discounted cash flows - Initial investment.
- Discount factor = 1 / (1 + r)^n.
Conventions:
- All monetary values in USD.
- Discount rates stated as decimals (0.05 = 5%).
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Frequently asked questions
Do students need an account to use the Investment Appraisal?
No. Students never need an account. They open a shared link or join with a code.
Can I print the Investment Appraisal without signing up?
Yes. This tool computes answers by code, so you can generate, preview and print worksheet without an account. A free account adds saving and student links.
How are the answers computed?
Every answer is computed by code and verified by a second independent method. No AI is used.
What grades is the Investment Appraisal for?
This tool fits Grades 8 – 12.
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Sample output, computed by code — change the options and Generate to make your own
Name: ____________________Date: ____________
Investment Appraisal
1. An investment of $491,000 generates $37,000 per year. Calculate the payback period.
2. An investment of $268,000 with scrap value $70,641 generates total profit of $82,000 over 5 years. Calculate the average rate of return (ARR).
3. An investment of $83,000 generates $79,000 per year. Calculate the payback period.
4. An investment of $499,000 with scrap value $132,237 generates total profit of $191,000 over 4 years. Calculate the average rate of return (ARR).
5. An investment of $451,000 generates $98,000 per year. Calculate the payback period.
6. An investment of $333,000 with scrap value $49,872 generates total profit of $75,000 over 4 years. Calculate the average rate of return (ARR).
7. An investment of $398,000 generates $88,000 per year. Calculate the payback period.
8. An investment of $341,000 with scrap value $87,306 generates total profit of $138,000 over 6 years. Calculate the average rate of return (ARR).
9. An investment of $254,000 generates $16,000 per year. Calculate the payback period.
10. An investment of $197,000 with scrap value $27,800 generates total profit of $38,000 over 6 years. Calculate the average rate of return (ARR).
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Answer Key — Investment Appraisal
1. An investment of $491,000 generates $37,000 per year. Calculate the payback period.
Solution:
Year 13: $481,000 recovered
Remaining: $491,000 - $481,000 = $10,000
Fraction of year 14: $10,000 / $37,000 = 0.27
Payback = 13 + 0.27 = 13.27 years
Answer: 13.27 years
2. An investment of $268,000 with scrap value $70,641 generates total profit of $82,000 over 5 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $82,000 / 5 = $16,400
Average investment = ($268,000 + $70,641) / 2 = $169,320.5
ARR = ($16,400 / $169,320.5) × 100 = 9.7%
Answer: 9.7%
3. An investment of $83,000 generates $79,000 per year. Calculate the payback period.
Solution:
Year 1: $79,000 recovered
Remaining: $83,000 - $79,000 = $4,000
Fraction of year 2: $4,000 / $79,000 = 0.05
Payback = 1 + 0.05 = 1.05 years
Answer: 1.05 years
4. An investment of $499,000 with scrap value $132,237 generates total profit of $191,000 over 4 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $191,000 / 4 = $47,750
Average investment = ($499,000 + $132,237) / 2 = $315,618.5
ARR = ($47,750 / $315,618.5) × 100 = 15.1%
Answer: 15.1%
5. An investment of $451,000 generates $98,000 per year. Calculate the payback period.
Solution:
Year 4: $392,000 recovered
Remaining: $451,000 - $392,000 = $59,000
Fraction of year 5: $59,000 / $98,000 = 0.60
Payback = 4 + 0.60 = 4.6 years
Answer: 4.6 years
6. An investment of $333,000 with scrap value $49,872 generates total profit of $75,000 over 4 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $75,000 / 4 = $18,750
Average investment = ($333,000 + $49,872) / 2 = $191,436
ARR = ($18,750 / $191,436) × 100 = 9.8%
Answer: 9.8%
7. An investment of $398,000 generates $88,000 per year. Calculate the payback period.
Solution:
Year 4: $352,000 recovered
Remaining: $398,000 - $352,000 = $46,000
Fraction of year 5: $46,000 / $88,000 = 0.52
Payback = 4 + 0.52 = 4.52 years
Answer: 4.52 years
8. An investment of $341,000 with scrap value $87,306 generates total profit of $138,000 over 6 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $138,000 / 6 = $23,000
Average investment = ($341,000 + $87,306) / 2 = $214,153
ARR = ($23,000 / $214,153) × 100 = 10.7%
Answer: 10.7%
9. An investment of $254,000 generates $16,000 per year. Calculate the payback period.
Solution:
Year 15: $240,000 recovered
Remaining: $254,000 - $240,000 = $14,000
Fraction of year 16: $14,000 / $16,000 = 0.88
Payback = 15 + 0.88 = 15.88 years
Answer: 15.88 years
10. An investment of $197,000 with scrap value $27,800 generates total profit of $38,000 over 6 years. Calculate the average rate of return (ARR).
Solution:
Average annual profit = $38,000 / 6 = $6,333
Average investment = ($197,000 + $27,800) / 2 = $112,400
ARR = ($6,333 / $112,400) × 100 = 5.6%
Answer: 5.6%
Answers computed by code. No AI, no credits.
Assumptions and Conventions
Assumptions:
- Payback period = time for cash inflows to equal the initial investment.
- ARR = (Average annual profit / Average investment) × 100.
- NPV = Sum of discounted cash flows - Initial investment.
- Discount factor = 1 / (1 + r)^n.
Conventions:
- All monetary values in USD.
- Discount rates stated as decimals (0.05 = 5%).
Made with TeachSpark
Investment Appraisal - General business - Payback and ARR
Payback period, average rate of return, and net present value. No AI, no credits.