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CAPITAL INVESTMENT APPRAISAL




            Overview





            • An investment decision can also be complicated by various factors,

                including the effects of inflation, relevant costs and revenues, taxation,
                capital rationing and projects with different life cycles.


            • Often in the past, capital investment appraisals were made by

                considering only economic aspects. In these enlightened times,

                however, appraisers are starting to consider other issues as well with
                the ultimate goal of sustainable value creation.


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

                textbook:

                    •   Managerial Finance

                           •  Chapter 6: The investment decision – parts 6.4 to 6.9.

                    • Management and Cost Accounting
                           •  Chapter 14: Capital investment decisions: the impact of capital rationing, taxation, inflation and risk –
                              pages 339–353.





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