Investment Appraisal Techniques - Essay Example

Extract of sample
Investment Appraisal Techniques

Some of the investment appraisal techniques used range from Net Present Value (NPV), Accounting Rate of Return (ARR), Internal Rate of Return (ARR) and Payback Period. Net Present Value (NPV) As one of the investment appraisal techniques, net present value (NPV) method ensures that the value of all the expected future cash flows is calculated into the present values (Droms, & Wright, 2010). More significantly, the net present value (NPV) method takes into consideration the difference that arises between the present value of the expected cash inflows of a project and the present value of the expected cash outflows that the project will yield in the future (Crosson & Needles, 2011). This is essential in the determination of whether or not the project is viable in the present condition if the projected will yield the projected cash flow in the future (Moyer, McGuigan & Kretlow, 2008). Calculations are done using the discount rate of the cost of capital that is determined depending on considerations of the future projected risk of the project (Hastings, 2009). ...Show more

Summary

Investment Appraisal Techniques Name Here Name of Institution City, State Date Investment Appraisal Techniques In most instances, businesses are faced with a wide range of investment projects to invest in, as a way of generating income. More so, companies invest in projects to expand its business base by increasing its competition edge, production and reduce the cost it incurs (Shim & Siegel, 2001)…
Author : isobelerdman
Save Your Time for More Important Things
Let us write or edit the essay on your topic
" Investment Appraisal Techniques"
with a personal 20% discount.
Grab the best paper

Related Essays

Investment appraisal and NPV analysis
The primary task of any enterprise is to maximize the wealth of its shareholders. So taking the right decision at right time is one of the key roles of any company. It is required for the profitability and sustainability of the company.
8 pages (2000 words) Essay
Assess the Value of Formal Investment Appraisal Techniques
This means that there are going to be three major themes that are going to be analyzed in the course of this essay. The question however remains whether the best business practices that need to be followed are being followed in the course of these formal investment ventures.
8 pages (2000 words) Essay
Investment Appraisal: The Zeta plc. Case
Whatever the kind of growth strategy an organization follows, the organization needs to evaluate whether that potential growth opportunity would be financially and strategically viable to the organization or not. For those evaluations, generally investment appraisal techniques are mainly utilized by the organizations to carry out financial viability of any particular growth opportunity or project (Baker et al, 2011).
6 pages (1500 words) Essay
Investment Appraisal Project
Taking this strategic move into account, the company is conducting an investment appraisal in order to evaluate which of the two options is more financially feasible. The company’s cost of capital is 12%. It is assumed, in the absence of information provided, that this is the weighted average cost of capital (WACC) for the company which is calculated with the help of the following formula.
8 pages (2000 words) Essay
Investment appraisal under uncertainty
Real options are different from other convectional financial options such as call and put options since they are not typically traded as securities in stock futures market. Corporate decisions today can only be made when a set of alternative strategies on investments are obtained.
5 pages (1250 words) Essay
Business Plan (3Gen Informatics)
Business Plan (3Gen Informatics). This paper intends to produce a realistic and a practical business plan for the proposed business venture dealing with computer sales and service. In this regard, various aspects such as forecasted cash flows and net present value (NPV) among others have been taken into concern in the proposed plan.
11 pages (2750 words) Essay
Investment Appraisal tools and techniques are used by many organizations in the private and public sectors . Critically evaluate
The discounted cash flow techniques Payback period method- according to this method, the feasibility of a company is measured by dividing the initial capital outlay by the periodic cash inflows. For this reason, the payback period is defined as the period a company takes to generate cash that is equivalent, in the amount, to the initial cost of investment.
3 pages (750 words) Essay
Issues in Accounting Theory and Practice (Case Study National Greenhouse Accounts Factor)
Regulations define emissions as the discharge of greenhouse gases into the environment, which result to scope 1 and 2 emissions. Scope 1 emissions deals with a facility’s direct emission
8 pages (2000 words) Case Study
Finance and Accounting Stock Features
The feature of cumulative preferred stock is that the company can get an advantage by issuing it over bonds because it can vote for suspension of dividend if the loss occurs and in case of cumulative stock company need to make up the remaining dividends when it earns profit. But normal preferred stocks do not have this facility. In case of callable stock, the company can redeem it after a specific date.
1 pages (250 words) Essay
Careers in accounting
Public accountants; they perform accounting, auditing tax and consulting tasks. Their clients include governments, individuals, and corporations. They work with financial documents that are required by law to disclose. Management accountants also called private
2 pages (500 words) Assignment
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT