Investment Appraisal

SCHOOL OF BUSSINESS AND LAW LONDON

NAME: Mr. ASHISH KUMR NAFRI

STUDENT ID: 0022KONS1109

SUBJECT: ACCOUNTING AND DECISION MAKING TECHNIQUES (ADMT)

LECTURER: MR. S. A. PALAN

CONTENTS

Introduction…………………………………………………………………….………2

Define Capital Investment Appraisal…………………………….………………….…2

Discounted cash flow methods……….………………………….………………….…4

Explanation of NPV…………………… ...................................................................…4

Explanation of IRR…………….……………………….…….……..…………………5

Advantages and disadvantages...……..……………………………………….……….5

Project calculations........................................................................................................6

Reason to choose project..............................................................................................11

Reference &Bibliography............................................................................................12

Introduction:-

It is very important for every business to be made right investment. It is very clear to all of us that capital investment concept plays an important role in the smooth running of an organization, in order to raise maximum income. Here we cannot say that every investment helps to maximize the profit of a business. So business managers have to find which investment should to be made for the business, then they do so by applying the different methods of capital investments appraisal technique. Investment appraisal helps the managers when they plan for the long term strategy for the organization. In this strategy they take decision on amount which they need to invest in fixed assets and also in working capital, in order to increase and maintain the productive efficiency of an organization.

Normally business managers have many choices to take in the shape of different projects or also each project requires different type of