Page 9 - PowerPoint Presentation

CAPITAL INVESTMENT APPRAISAL

Post-investment audit

• It is important that firms compare actual results with the

estimated cash flows used in the capital budgets of projects

and provide explanations for the differences. The main

objective of a post-investment audit is to improve the

capital budgeting process.

• A post-investment audit is useful to:

• monitor and improve the performance of projects subsequent to

implementation;

• ensure that management work hard to achieve forecasts;

• provide valuable lessons for decision-making when it is time to

evaluate further investments.

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