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In my earlier articles on Payback and Accounting Rate of Return, we noticed that those two investment appraisal methodologies do not take into consideration the time value of money.
So what really is the time value and present value of money and […]

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Before any Investment appraisal:

Before we embark on the choosing of the appropriate investment appraisal method, we should first consider the following:

does the investment fit the strategic direction of the company. We really need to understand the profile […]

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Further to my earlier article on Accounting Rate of Return, let’s look at another simple investment appraisal method called Payback Period.
This method seeks to determine how long it takes for the investment project to pay back its initial capital cost.
Illustration:
Let’s say we have two […]

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There are many investment appraisal techniques.

Today’s article is confined to the discussion of the Accounting Rate of Return Method or Accounting Return on Book Value. First, we shall go thro’ an illustration to demonstrate how it’s being calculated and then go on with the […]

Investment Appraisal Techniques:-
1.0 Accounting Rate Of Return
2.0 Payback Period
3.0Criteria-of-a-good-investment-appraisal-technique
4.0 Time-value-and-present-value-of-money concept
5.0 Net present-value-NPV
6.0 Internal-rate-of-return-IRR
7.0 Advantages-and-disadvantages-of-internal-rate-of-return
8.0 Using-the-profitability-index-its-usefulness-and-critique
9.0 Net Present Value As The Most Superior Method