Name: mehzil Haseeb

Roll no: mcoe-f19-043

Semester: (2)

SUBMITTED TO: SIR AMIR ILIYAS

IDENTIFY AND DISCUSS DIFFERENT METHODS OF INVESTMENT
APPRAISAL:
Investment appraisal techniques are payback period, internal rate of return, net
present value, accounting rate of return, and profitability index. They are
primarily meant to appraise the performance of a new project. ... Each technique
evaluates the project from a different angle and provides a different insight.
Investment appraisal is the evaluation of investments with regard to their
profitability and/or cost effectiveness. The overall objective is to identify the
attractiveness of the investment from the view point of the investor. The methods
used are the Net Present Value (NPV), Internal Rate of Return (IRR) and Annuity
method. For small scale investments, the payback method and the return on
investment method (ROI) are also applied.

Methods:
Net present value (NPV)
NPV is today’s value of the difference between cash inflows and outflows projected at future
dates, attributable to capital investments or long-term projects

Internal rate of return (IRR)

the IRR calculates the exact rate of return that a project is expected to achieve, which is the discount
rate used that results in a zero net present value (NPV) of the difference between cash inflows and
outflows