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BusinessEdexcel (9BS0)Theme 2

Investment Appraisal Calculator

Edexcel A-Level Business

Investment appraisal is a key financial decision-making topic in Edexcel A-Level Business Theme 2. This interactive tool lets you compare three core methods — Payback Period, Average Rate of Return (ARR), and Net Present Value (NPV) — using your own cash flow figures. Enter initial investment, annual net cash flows, and a discount rate to generate side-by-side results with full worked calculations. Includes a comparison table showing the strengths and limitations of each method — ideal for evaluation questions on Papers 1, 2, and 3.

Uses Google Fonts (Instrument Serif, Plus Jakarta Sans). Requires an internet connection for full styling.

Frequently asked questions

What are the three main methods of investment appraisal?+
The three methods are Payback Period (how long until the investment is repaid), Average Rate of Return (ARR — the average annual profit as a percentage of the initial investment), and Net Present Value (NPV — the total present value of future cash flows minus the initial investment, accounting for the time value of money).
Which investment appraisal method is the most accurate?+
NPV is generally considered the most accurate because it accounts for the time value of money by discounting future cash flows. However, Payback Period is the simplest to calculate and is useful for businesses focused on liquidity, while ARR is helpful for comparing percentage returns across projects.

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