Investment Appraisal is a typical management/managerial accounting examination topic for intermediate to higher level accounting. It normally involves making long term decision on capital investment .
These topics are tested in the LCCI Management Accounting And A-Level Accounting GCE level.(click here for more details).
Before we can understand Investment Appraisal, we need to apprehend the following:
STAGE A: EVEN BEFORE MAKING CAPITAL INVESTMENT DECISIONS STAGE
Why Capital Investment Decisions are so important
The types of capital project and the process
What is Capital budgeting
Understand the basic concepts of value of money in terms of:
What is Future Value Of Money concept
What is Time Value of Money concept
What is Present Value Of Money concept
Things to do or Factors to Consider before embarking on an investment appraisal exercise
What should be the criteria Of Good Investment Appraisal method.
STAGE B: DURING THE CAPITAL INVESTMENT APPRAISAL STAGE
What relevant data or salient points to look for
Understand what is Terminal Cash Flows of a project
Understand the different investment appraisal methodologies and the advantages & disadvantages of each method:-
Accounting Rate of Return (ARR) Investment Appraisal methodl
Payback Investment Appraisal method
Internal Rate of Return (IRR) Investment Appraisal method (Part 1)
Internal Rate Of Return (IRR) Investment Appraisal method (Part 2)
Net Present Value(NPV) Investment Appraisal Method
The need to understand what is Profitability Index in Investment Appraisal
Which investment appraisal method should we choose
Stage C:
Understand the need or importance or objectives of a Post Audit of Capital Investment project
No comments:
Post a Comment