1. No.

There are several limitations to using the investment appraisal technique and that is the
reason why it is not a reliable and effective method to measure the success of innovative
projects. The limitations to the investment appraisal are:

 Investment appraisal relies on assumptions and forecasts about the future.

These assumptions and forecasts may not always be accurate. This could potentially lead to
incorrect investment decisions. An example is assuming that that the future cash flow stays
the same.

 Investment appraisal methods typically focus on internal factors, such as cash

flows and costs, and do not take external factors into account. An example could be
inflation.

 Investment appraisal may be based on incomplete or inaccurate information.

This could lead to incorrect investment decisions.

 Lack of flexibility: Investment appraisal methods are often based on fixed

assumptions and calculations, which may not allow for changes in circumstances or
unexpected events.

2. Resource management: Managers need to consider the resources that will be required to complete
the project. This will help them to plan and allocate resources effectively.

Timeline: Managers need to establish a timeline for the project, such as deadlines. This will help them to
monitor progress and ensure that the project stays on track.

Customer feedback: Managers should gather feedback from potential customers and stakeholders to ensure
that the projects meets their needs and expectations.

Risks management: It is crucial for managers to identify potential risks and develop a plan to have a way
around them. This will help to minimize the impact of unexpected events and keep the project moving
forward

Change management: Managers should anticipate changes and be prepared to adapt the strategy as needed.

Cost and revenue analysis: It's important for businesses to evaluate the cost and revenue potential of a
project.