Net Present Value As The Most Superior Method
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We have reviewed the four methods of investment appraisal techniques:
Payback
Accounting rate of return
Net Present Value
Internal Rate of Return
The pros and cons of the payback, accounting rate of return and internal rate of return have been explained.
Fundamentally, the greatest disadvantage of the payback and accounting rate of return is that [...]
May 8, 2006
Tags: Capital Investment Appraisal Methods, Net Present Value, NPV Posted in: Capital Investment Appraisal 
One Comment
Investment Appraisal Methods: Using The Profitability Index, Its Usefulness And Critique
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The profitability index is an alternative way of stating the net present value (NPV).
It takes the present value of the cash-flows and divides them by the initial capital outlay.
i.e.: Profitability Index (PI) =Present value of cash flows / Initial cash outflow
Interpretation:
If the PI is more than one, then [...]
May 6, 2006
Tags: Capital Investment Appraisal Methods, Profitability index Posted in: Capital Investment Appraisal 2 Comments
Main Content Page For Articles On Investment Appraisal Methods/Techniques/Management
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
April 7, 2006
Tags: Capital Investment Appraisal Methods Posted in: Capital Investment Appraisal One Comment
