BIT 4484 Chapter Notes - Chapter 2: Discount Window, Balanced Scorecard, Payback Period

• School: Virginia Tech
• Department: Business Information Technology
• Course: BIT 4484
• Professor: P J Fernandez

Document Summary

Strategic planning: involves determining long-term objectives by analyzing the strengths and weaknesses of an organization, studying opportunities and threats in the business environment, predicting future trends, and projecting the need for organizations identify and select potential projects. Mind mapping: a technique that uses branches radiating out from a core idea to structure thoughts and ideas. Net present value analysis: is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time. Opportunity cost of capital: the return available by investing the capital elsewhere. Cash flow: benefits minus costs, or income minus expenses. Discount rate: is the rate used in discounting future cash flows. Discount factor: a multiplier for each year based on the discount rate and year. Return on investment: is the result of subtracting the project costs from the benefits and then dividing by the costs.