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CAPITAL INVESTMENT APPRAISAL
Other issues in investment appraisal
• From your prior learning you should be able to perform and evaluate an
investment decision on an intermediate level. However, an investment
decision can be made more intricate by various factors and when used
for certain purposes. These complicating factors include the effects of
inflation and taxation; investments with a high level of uncertainty and
risk; insufficient funds to take on all appropriate projects making capital
rationing obligatory; and projects with different lifecycles.
• Now study the following subsections in Managerial Finance and attempt
the activities included therein: Chapter 6
• 6.3.4 Net present value index
• 6.3.5 Different project life cycles
• 6.3.8 Modified internal rate of return
• 6.4.1 Inflation
• 6.7 Uncertainty and risk
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