FREE online courses on Investment Appraisal - Investment Appraisal - Investment Appraisal - Methods And Considerations - Investment Appraisal Methods

 

Investment appraisal methods can be divided into two basic areas. One in which no time value of money is taken into consideration and one in which it is. Using time value of money while evaluating projects is known as discounting.

 

A. Non-Discounting Methods

          Urgency

          Payback Period

          Accounting Rate of Return

          Debt Service Coverage Ratio

B. Discounting Methods

          Net Present Value

          Profitability Index

          Internal Rate of Return

C. Economic Value Added (EVA) charm as a Performance Measure