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Finacial management - Essay Example
Investment Opportunities author elected a recent example of the long-term investment made by governmental institution (here and after referred to as government department (A). The objective of the investment project(s) elected is to provide modern office accommodation for department (A)'s staff in a manner which represents value for money…
Therefore, as a matter of investment objectives, the study turns to somewhat outrule the relevance of Payback Period, Internal rate of return (IRR) and Overall rate of return (ORR) investment appraisal techniques and invites to focus on Life-Cycle/Whole life Cost Analysis (LCCA/WLCA), NPV, Net Benefits (NB) and Net Savings (NS), Benefit-to-cost ratio (BCR) and Savings-to-investment ratio (SIR) appraisal techniques. Term 'somewhat' in this case refers to the existence of profit-bearing or cash inflow-bearing opportunities connected with letting office space to another governmental institution (department (A)) for a rent paid yearly.
There are many methods available to calculate specific economic performance measures. Used appropriately, these methods allow the investor to analyze the economic consequences of particular decisions and fairly evaluate alternative approaches. The various economic analysis methods include:
Net Benefits (NB) and Net Savings (NS) are analytical methods used to describe time-adjusted economic benefits or savings between competing alternatives. NB is used to examine how costs of competing alternatives impact investment opportunities (e.g. ...