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CAPITAL INVESTMENT APPRAISAL




            Introduction







            • An appropriate capital investment decision can only be made after

                considering several quantitative and qualitative factors.


            • Quantitative appraisal of a proposed capital investment usually requires
                forecasting of investment-related and associated cash flows, which is

                then discounted at an appropriate risk adjusted discount rate based on

                WACC.


            • This process is complicated further when involving a foreign investment

                as we then have to consider additional factors, such as country risk and
                different currency units.


            • This learning unit is based on the following chapters in your prescribed

                textbook:

                    • Managerial Finance – 8th edition

                    • Chapter 6: The investment decision, part 6.9



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