National Pharmaceutical Pricing Authority Interview Questions, Process, and Tips

The PV ratio formula calculates the contribution margin per unit as a percentage of the selling price per unit.

• PV ratio = (Contribution margin per unit / Selling price per unit) x 100

• Contribution margin per unit is calculated as selling price per unit minus variable cost per unit

• Example: If selling price per unit is $50, variable cost per unit is $20, then PV ratio = (($50 - $20) / $50) x 100 = 60%

Net present value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.

• NPV is calculated by subtracting the initial investment from the present value of cash inflows.

• It takes into account the time value of money, meaning that a dollar today is worth more than a dollar in the future.

• A positive NPV indicates that an investment is expected ...read more