Financial appraisal of project proposals

Abstract

Generally, project managers have a difficulty in selecting the potential project proposals which give the best rewards for the company. One way to do this is to apply financial appraisal tools to evaluates the best investment decision based on predicted costs and revenues which have been determined from either ground-up or top-down costing. The evaluation also depends on the size of the project and the time span over which the costs and benefits are going to be spread[1]. This article will present you methods to justify the worthwhile project which are payback analysis, discounted cash flow, and internal rate of return based on the concept of the “Time value of money”.