Introduction

Investment appraisal is the action of determining if a business purchase will bring a profit. It is also used to compare investment opportunities to decide which is worth choosing. 

There are three calculations you can use to help make this investment decision: "payback period" (PBP), "average rate of return" (ARR), and "net present value" (NPV).

The PBP shows how much time it will take until a business has earned back the cost of the investment using its net cash flow.

The ARR shows the profitability of an investment over a given period of time.

The NPV uses the "discounted cash flow" calculation to compare investments that cost the same.

Course curriculum

  • 1

    Course Information & Support

    • Please Check Now That Your Phone Is In Your Bag. Please Stay For 40 Minutes Of Learning & Sign Out For The Bathrrom During The Last 5 Minutes of Class.

    • Only Use The Laptop Assigned To You. Return To Assigned Slot With No Slack Cord.

    • Please Don't Disrupt Our 40 Minute Work Cycle. Leave For The Bathroom During The LAST 5 MINUTES Of Class.

    • Supply Check Is On The First Resource Bank Day Of Each Quarter

    • How Well Are You Demonstrating The IB Learner Characteristics? Which Is Your Super Power & Which Presents The Greatest Challenge?

    • Do You Skip Class?

    • Fact Sheet Packet Of Class Policies- Please Scroll Through And Review Again

    • Meet Your Teacher: Dr. Eva Bogard

    • You Should Do An Internship Every Year Until You Graduate From College

    • Welcome IB Business Management Student

    • Here Is The Master Plan...

    • The IB BM Syllabus Consists Of 5 Units With A Total Of 40 Total Chapters ("Courses") That You Are Responsible For Learning

    • The Official IB Business Management Guide & Syllabus

    • The Full IB BM Textbook Is In TEAMS

    • Chapter Work Cycle =The Same 7 Day Format For Each Chapter. You Always Know What We Are Doing In Class & What Is Assigned For Homework.

    • DUE DATES & DEADLINES

    • Late With A Good Reason Is Still Late (Missing Work Submitted After 5 Calendar Days = 0%).

    • Your Makeup Day From An Absence Is The Following Class Day. Read Instructions Carefully & Review Policies When Absent.

    • Finished Early? Don't Pack Up! Do This ...

    • Finished Early? Keep Track Of Current Events In The Business World

    • Business Careers. Which Might Be A Good Fit For You?
  • 2

    The Notebook Project - A Daily Learning & Study Tool

    • Read The Rules For Your Notebook Project Before Every Grading Day. This Paper Must Be Stapled Onto The Inside Cover Of Each Composition Notebook

    • Your Notebook Project Helps You Build Strong Attention To Detail. This Is A Valuable Life Skill.

    • LOOK: Page-By-Page Visual Instructions To Help You Earn a 100% On Every Notebook Project.

    • A 100% Notebook Project Sample - Make Yours Just As Nice.

    • A 100% Notebook Project Sample - Compare Yours.

    • Notebook Checklist & Reflection Sheet (The Blue Sheet). Complete & Staple Onto The Last Page Of Your Chapter Notes BEFORE Scoring Day. This Blue Color Checklist Is Available In Class Or You Can Print It Yourself.
  • 3

    Start Your Notebook Project By Outlining This Chapter. Start Your Notebook Project By Outlining This Chapter. Then Outline A Long IB Exam Answer Using A Spider Map.

    • New 3.8 Chapter = 5 Headings

    • Can You Listen To Music? Yes, But Only If You Follow All The Rules.

    • Review The Instructions For These Two Assignments.

    • LOOK: A Visual Guide For How To Create Your Outline. There Are Also Samples Posted In The Notebook Section Above. Great Attention To Detail = 100%

    • How To Draw A Spider Map

    • Video: Watch A Spider Map Being Created (Best Study Tool)

    • LOOK: This Is What A Great Spider Map Looks Like. Use This Sample As Your Model.
  • 4

    "RESOURCE BANK" = Topic Lessons (31) Begin Below this Point:

    • No Music On RB Days. Plug In Your Ear Buds. Place Them In Your Ears & Use Them To Listen & Learn From The Video Lessons.

    • What is the Resource Bank?

    • Review The Instructions For This RB Assignment.

    • Take Good Notes - These Posts Contain The Content You Want To Write On The IB Exams

    • LOOK: This Is What A Great RB Page Looks Like. Use This Sample As Your Model.

    • Important Detail: Remember To Highlight The RB Section Titles & Number All Posts Consecutively

    • RB = 5 Sections With 31 Posts (= 2 RB Days + HW)

    • What You Should Be Able To Do By The End Of This 3.8 Course
  • 5

    Key Terms

    • Video: The Time Value Of Money

    • Video: What Is Inflation & Why Does It Matter?

    • Video: The Difference Between Saving, Investing & Speculating

    • Video: What Is An Investment?

    • Introduction To Investment Appraisal

    • Video: Capital Expenditure Is Used For Making Investments Which Should Bring Back A "Return" (=$$$)

    • Exam Tip: What Data Is Needed To Make An Appraisal? SAY THIS & DO THIS ON THE IB EXAM!

    • Handout: How to Compare Two Different Investments

    • Handout: Cash Flow Forecasting Helps Handle Future Uncertainty

    • Handout: Definitions & Exam Tip Concerning Cash Inflows & Outflows

    • Video: Mr. B's Investment Appraisal Review- Watch & Take Notes Until 7:25
  • 6

    Payback Period

    • Video: Payback Method of Investment Appraisal (TTB)

    • Video: Payback Period (T2U)

    • Video: Payback Period Tutorial (BBB)

    • Video: Mr. B Reviews The Payback Period Method
  • 7

    Average Rate Of Return (ARR)

    • Video: ARR (TTB)

    • Video: How To Calculate The Average Rate Of Return With A Worked Example (T2U)

    • Video: ARR Tutorial (BBB)

    • Handout: Example Of An ARR Calculation

    • Video: Mr. B Works Out An Average Rate Of Return Example

    • Handout: You Must Take These 3 Factors Into Account When Deciding If An ARR On An Investment Is Actually Good
  • 8

    Discounted Cash Flows

    • Video: What Is "Discounted Cash Flow"? (DCF)

    • Handout: Why Discount Future Cash Flows?

    • Optional Video: How To Value A Company Using Discounted Cash Flow (DCF)

    • Video: Discounted Cash Flow - Net Present Value (T2U)
  • 9

    Net Present Value

    • Handout: 2 Factors Must Be Considered When Looking At The Present Value Of Future Money

    • Video: Net Present Value (from TTB)

    • Video: How To Calculate Net Present Value (BBB)

    • Video: How To Calculate Net Present Value (T2U)

    • Exam Tip: How To Use The Discount Table On The IB Exam

    • Handout: An Example Of An NPV Calculation = 4 Steps

    • Video: IB BM Teacher Works Out An NPV Exam Question
  • 10

    Investment Appraisal & The CCES Concepts (Creativity-Change-Ethics-Sustainability)

    • What Do These Global Conglomerates Invest In?

    • Review The Instructions For The CCES Assignment.

    • Read These CCES Definitions. If You Write Them On Your May Exams You Get Credit For Clear Evidence of "Synthesis & Evaluation"

    • Your CCES Assignment Begins At The Top Of A New NB Page: Title= CCES, Then Write 4 CCES Impact Statements For This Chapter Following The Model.

    • LOOK: This Is What A Great CCES Page Looks Like
  • 11

    Case Studies Assignment: This Is Your Practice For The Senior May IB Exams.

    • This Was The Real May 2024 IB BM Standard Level (SL) Paper 2 Exam. Get A Feel For It Now. Know That We Are Preparing For It Every Day In Class & For Homework So You Will Have The Best Chance Of Earning Your Best Score.

    • This Was The Real May 2024 IB BM Higher Level (HL) Paper 2 Exam. Get A Feel For It Now. Know That We Are Preparing For It Every Day In Class & For Homework So You Will Have The Best Chance Of Earning Your Best Score.

    • Exam Tip: Paper 2 Section B (2024-2028)

    • Step-By-Step Instructions For Doing Your Case Studies As Practice For Your Senior May Exams

    • LOOK: This Is What A Completed & Corrected Case Study Analysis Looks Like. Use This Sample As Your Model.

    • See How The IB BM Command Terms Are Organized

    • What Are Command Terms & Why Are They Important?

    • Old Command Terms List = Rules for Answering Test Questions

    • New Command Terms Definitions List (2024+)= Directions for Answering Test Questions

    • Chapter 3.8 Has 4 Case Studies. Choose & Complete At Least 3.

    • Finished Early? Don't Pack Up! Do Review Questions & Then Go Review IB BM Formulas On Quizlet Or Blooket
  • 12

    Review Day Activities + Presentation Day

    • Read & Follow These Review Day Instructions

    • Watch: 3.8 Chapter Review With Mr. L

    • What Should You Do If You Get Stuck On A Question? Don't Skip It! Do This...

    • LOOK: This Is What A Great Chapter Review Page Looks. Use This As Your Model.

    • Here Are The 3.8 Review Worksheets With 5 Tasks & 20 M/C. Title The Top Of A New Page. Then Label The Tasks And Write The Answers In Your Composition Notebook.

    • Presentation Day Instructions

    • FINISHED EARLY? THERE'S NO TIME TO WASTE! DO THIS ...

    • 3.8 Quizlet

    • Have You Achieved the 3.8 Key Learning Outcomes?

    • You Are Almost Finished!

    • Don't Forget The Last Piece!

    • Memorize & Review The 3.8 Exam Formulas
  • 13

    Complete This Section In Your New IB BM Exam Prep Composition Notebook. Make A Divider. Start After Review Day Presentations. It Is Included In Your Final Exam Grade.

    • All Exam Practice Work Goes In Your Special "Exam Prep" Composition Notebook. Do It After Review Presentations & After The Chapter Quiz.

    • Video: IB May Exam Review For Investment Appraisal

    • IB Exam Practice: Payback Period

    • IB Exam Practice: ARR & PBP

    • IB Exam Practice: ARR & PBP & NPV
  • 14

    3.8 Quiz Quiz Day: Write Your Score In Your Notebook At The Top Of The Shark Tank Page In Red Ink.

    • Come Here On Quiz Day If You Are In The Classroom - Makeups Are On The Day You Return

    • Did You Finish The 3.8 Exam Review & Practice?

    • After This 3.8 Quiz Complete The 3.8 Tasks In The Official IB BM May Exam Prep Course

    • Blue Sheet Instructions. Pick Up A Blue Checklist & Reflection Handout To Complete & Staple Into Your Notebook

    • Due Today On Quiz Day (Before Midnight) Is Your Completed Chapter Notebook Project
  • 15

    Unit 3 Finance Exam

    • Be Prepared For A Unit 3 Finance Test