What Are The Criteria Of A Good Investment Appraisal Method

Earlier article looks at factors to consider BEFORE even conducting any investment appraisal.

Once we have determined the need to have such investment appraisal, we should next turn to looking for an appropriate Investment appraisal method.

Some of the criteria of a good investment appraisal method includes the following:

• it should recognizes the time value of money,

• it should considers the risk associated with an investment,

• it should takes the full economic life of the investment into account,

• it is not an arbitrary decision rule which relies on interpretation,

• it should focuses on cash flows

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