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[see more articles on this category] 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 [...] [see more articles on this category] 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 [...] 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 |  FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach. | |||||
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