Net Present Value (NPV)
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== Big Idea == | == Big Idea == | ||
| + | Project business case development is a critical point in a project where it gives a justification for undertaking a project, in terms of evaluating the benefits, cost, and risk of alternative options and the rationale for the preferred solution. Its purpose is to obtain management commitment and approval for investment in the project. In a business case, financial appraisal plays a key role to answer the fundamental economic questions of whether an investment should be made | ||
| + | and which project should be chosen among a selection of different alternatives. | ||
| + | The task of financial appraisal is to forecast the financial effects of | ||
| + | a planned investment and to present the data in such a way that a | ||
| + | a reasoned investment decision can be reached. | ||
| + | |||
| + | The net present value (NPV) method is the most frequently used approach in the financial appraisal of a project. | ||
== Applications == | == Applications == | ||
Revision as of 21:43, 10 February 2022
Contents |
Abstract
Big Idea
Project business case development is a critical point in a project where it gives a justification for undertaking a project, in terms of evaluating the benefits, cost, and risk of alternative options and the rationale for the preferred solution. Its purpose is to obtain management commitment and approval for investment in the project. In a business case, financial appraisal plays a key role to answer the fundamental economic questions of whether an investment should be made and which project should be chosen among a selection of different alternatives. The task of financial appraisal is to forecast the financial effects of a planned investment and to present the data in such a way that a a reasoned investment decision can be reached.
The net present value (NPV) method is the most frequently used approach in the financial appraisal of a project.
Applications
Limitations
Annotated Bibliography
Reference Example: According to scientists, the Sun is pretty big.[1] The Moon, however, is not so big.[2]
References
- ↑ E. Miller, The Sun, (New York: Academic Press, 2005), 23–25.
- ↑ R. Smith, "Size of the Moon", Scientific American, 46 (April 1978): 44–46.
Actual Reference: According to scientists, the Sun is pretty big.[1] The Moon, however, is not so big.[2]
References
- ↑ Häcker J., Ernst D. Investment Appraisal. In: Financial Modeling. Global Financial Markets., (Palgrave Macmillan, London, 2017), https://doi.org/10.1057/978-1-137-42658-1_8
- ↑ R. Smith, "Size of the Moon", Scientific American, 46 (April 1978): 44–46.
