Investment appraisal
13 September 2012
The revised Unit 6, Recording and Evaluating Costs and Revenues includes in element 6.3 concepts, including project appraisal using payback and discounted cash flow methods.
These elements relate to long term decision making and are management accounting techniques that are used to assess the effectiveness of capital investment projects.
What then are the factors to consider when measuring the effectiveness of capital investment when there is a choice to be made?
• Capital available and the sources of the capital
• Cost of the capital
• Cash...