ABSTRACT
Investment appraisal techniques provide a financial guide as to whether such a plan makes economic sense. This chapter considers four methods for making such an assessment, two fairly simple and obvious ones which anyone can remember and use as a preliminary estimation as to whether to proceed. The other two techniques are rather more complicated and rely on a concept called discounted cash flow (DCF). Calculating the net cash flow arising from incomings and outgoings of cash is probably the hardest part of setting up the figures, but it is crucial in determining the project's success or otherwise. One way of assessing the project is to calculate how long it will take Blaise Pascal to get her 10,000 investment back. In order to understand the more complicated DCF methods it is important to appreciate the significance of the interest rate to the value of money over time. The chapter examines the importance of non-financial aspects in decision making.
