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Investment appraisal criteria underlying investment decisions

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  • Roxana Corina CARUNTU

Abstract

Companies that want to grow their activity must decide on which investment projects to focus. Investment in financial terms, represents a use of capital that at the end of the investment wants to obtain a profitability. Following the investment, the company hopes that both its volume and activity increase. If the company faces several potential investment projects, it will have to achieve a complex analysis of their characteristics. In support of this analysis, the company can use different criteria to see how profitable are the project. Thus, in this article I will present two of these criteria: net present value and internal rate of return.

Suggested Citation

  • Roxana Corina CARUNTU, 2011. "Investment appraisal criteria underlying investment decisions," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 189-194, September.
    • Handle: RePEc:cbu:jrnlec:y:2011:v:3:p:189-194
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    References listed on IDEAS

    as
    1. Laurence Booth, 2007. "Capital Cash Flows, APV and Valuation," European Financial Management, European Financial Management Association, vol. 13(1), pages 29-48, January.
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