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Q: What are the advantages and disadvantages associated with Net present value and internal rate of return as methods of investment appraisal?
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What are the comparison and differences of advantages and disadvantages of investment appraisal techniques?

They are simple to use, tells how long it takes to recoup an investment, useful for short time duration and on firms having cash flow problems. However, they are too simple, ignore qualitative aspects of decision, focus only on pay back period, does not look at the profitability of the project or the interest rates.


What are the advantages of appraisals?

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What is payback method on investment appraisal?

In payback period of investment appraisal method all cash inflows and outflows are analysed and find out that in how many years investment proposal will earn the invested money.


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Investment Appraisal Methods?

The Payback method is one of the investment appraisal methods. Other methods to appraise investments are the Average Rate of Return and the Net Present Value method.


What are the disadvantages of project appraisal?

The main disadvantages of project appraisal are cost and time. The cost of a project appraisal may outweigh the potential profit to be made. The time taken to complete the appraisal may have an effect on the company if employees have been deployed from other areas.


What has the author Kenneth McConville written?

Kenneth McConville has written: 'Appraising an investment appraisal' 'Appraising an economic appraisal'


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IRR, NPV, DCF are the main Investmetn Appraisal Techniques.


What has the author Rob Dixon written?

Rob Dixon has written: 'Venture capitalists and investment appraisal'


Advantage and disadvantage of NPV what is the advantage and disadvantage of Net Present Value Method?

Advantages: a. It will give the correct decision advice assuming a perfect capital market. It will also give correct ranking for mutually exclusive projects. b. NPV gives an absolute value. c. NPV allows for the time value fo the cash flows. Disadvantages: a. It is very difficult to identify the correct discount rate. b. NPV as method of investment appraisal requires the decision criteria to be specified before the appraisal can be undertaken.


What are principle of participatory rapid appraisal?

There are numerous advantages to using the participatory rural appraisal process. Advantages include identifying the genuine priorities for the target group, motivating local workers, and the use of local resources.