Project Evaluation of Rahimafrooz Renewable Energy Limited
Project Evaluation of Rahimafrooz Renewable Energy Limited
Core Concept of the Topic
Business Plan:
– Contents
– Executive summary
– Mission and strategy statement
– Market analysis
– Operations (of the business)
– Management and staffing
– Financial projections
– Contingencies
When a business makes a capital investment, it incurs a current cash outlay in the expectation of future benefits. Usually, these benefits extend beyond one year in the future. Investment is asset such as equipment, buildings and land as well as the introduction of a new product, a new distribution system, or a new program for research and development. The firms future success and profitability depend on long-term decisions currently made.
An investment proposal should be judged in relation to whether or not it provides a return equal to, or greater than, that required by the investors. The selection of an investment project may affect the rate of return required by investors.
One of the most important task in capital budgeting is estimating future cash flows for a project. The final result we obtain from our analysis are no better than the accuracy of cash flow estimates. The firms invest cash now in the hope of receiving even greater cash returns in the future.
There are four widely used methods available for project evaluation and capital budgeting.
1. Payback period
2. Internal rate of return
3. Net present value
4. Profitability index
The first is a simple additive method for assessing the worth of a project. The remaining methods are more complicated discount cash flow techniques. Discounted cash flow methods enable us to capture differences in the timing of cash flows for various projects through the discounting process. In addition, through our choice of the discount (hurdle rate), we can also account for project risk.
Payback period (PBP)-
The payback period (PBP) of an investment project tells us the number of years required to recover the initial
Core Concept of the Topic
Business Plan:
– Contents
– Executive summary
– Mission and strategy statement
– Market analysis
– Operations (of the business)
– Management and staffing
– Financial projections
– Contingencies
When a business makes a capital investment, it incurs a current cash outlay in the expectation of future benefits. Usually, these benefits extend beyond one year in the future. Investment is asset such as equipment, buildings and land as well as the introduction of a new product, a new distribution system, or a new program for research and development. The firms future success and profitability depend on long-term decisions currently made.
An investment proposal should be judged in relation to whether or not it provides a return equal to, or greater than, that required by the investors. The selection of an investment project may affect the rate of return required by investors.
One of the most important task in capital budgeting is estimating future cash flows for a project. The final result we obtain from our analysis are no better than the accuracy of cash flow estimates. The firms invest cash now in the hope of receiving even greater cash returns in the future.
There are four widely used methods available for project evaluation and capital budgeting.
1. Payback period
2. Internal rate of return
3. Net present value
4. Profitability index
The first is a simple additive method for assessing the worth of a project. The remaining methods are more complicated discount cash flow techniques. Discounted cash flow methods enable us to capture differences in the timing of cash flows for various projects through the discounting process. In addition, through our choice of the discount (hurdle rate), we can also account for project risk.
Payback period (PBP)-
The payback period (PBP) of an investment project tells us the number of years required to recover the initial