Capital Investment Appraisal -“ Main Topic

Capital Investment Appraisal

Capital Investment appraisal form part of the examination question.

To understand it, the student needs to understand basic principles of time value of money, future value of money and present value of money,the different types of investment appraisal and the advantages and disadvantages of the various methods.

Article No.

Heading

1

Basic Understanding Time value of money

2

Basic Understanding Future value of money

3

Basic Understanding Present value concept

4

Before the investment appraisal and the criteria of a good investment appraisal technique or method

5

Accounting rate of return

6

Payback period methodology

7

Internal rate of return methodology

8

Advantages and disadvantages of Internal Rate Of return (IRR)

9

Net Present Value (NPV) methodology

10

The Profitability index & its usefulness and critique ( scarce capital versus different projects available)

11

Which is the most appropriate capital investment appraisal method?