AFM: Concepts and Practice · Part C: Financial Management

Chapter 19: Capital investment decisions and lease finance

How to judge whether a project earns its cost of capital, and whether to lease a machine or buy it.

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

• 19.1Project cash flowsp. 255
• 19.2Payback, ARR and the lenderp. 256
• 19.3NPV, PI and discounted paybackp. 257
• 19.4IRR, and choosing between projectsp. 258
• 19.5Lease finance: lease or buyp. 259
• Exam traps and quick checksp. 260
• Practice: 16 questions in three roundsp. 261
• Answers, with every wrong option explainedp. 263
• Make it stickp. 265
• Chapter 19 on one pagep. 266

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.