ABSTRACT
This chapter focuses on the nature of investment appraisal and an exploration of the difference between micro and macro approaches. It deals with the conventional and the more scientific methods of investment appraisal. The chapter looks at the content of a feasibility and business plan related to the hotel sector. Long experience in the tourism sector has demonstrated that many investment decisions are very emotional; sometimes projects by physical planners are taken for granted, wrong investment appraisal methods are applied and/or the right method is used incorrectly. An investment comprises a planned series of capital expenditures undertaken in anticipation of their generating a larger series of cash flows at various times in the future. The discounting methods mean that we take into account the revenues and cash costs over the life of the project, discounting them to a base year and subtracting the capital costs of the project.
