ABSTRACT
This entry explores various investment evaluation techniques with special attention to their application in energy investments. Key components of the techniques are described, including the concept of the time-value of money, discount rates, and the role of risk and its consideration in performing a financial assessment of a project. Financial evaluations from simple payback periods to internal rate of return (IRR) analysis are discussed with the entry concluding that net present-value analysis is, in almost all cases, the preferred evaluation technique.
