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Refer to the figure below. Growing 1,000 bushels of wheat and no bushels of corn each year is:
Cash Inflows
Money received by a business from its activities, e.g., sales of goods, provision of services, loans received.
Cash Outflows
Cash Outflows are the amounts of money paid out by a business in a period, including expenses, investments, and loans repayments.
Profitability Index
A calculation used to determine the relative profitability of an investment, computed by dividing the present value of future cash inflows by the initial investment cost.
Payback Technique
A method of evaluating investments by determining the length of time it will take to recoup the original investment amount.
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