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The FAP Model — Basic Data

In: The FAP Model and Its Application in the Appraisal of ICT Projects

Author

Listed:
  • Frank Lefley

    (University of Hradec Králové)

Abstract

In this chapter, we explore some of the basic data requirements for implementing the FAP model. Our primary concern will be with the inputs to the financial elements of the decision-making process that follows the well-worn path of the NPV approach. This method of investment appraisal is recognised as being the one technique which gives a spot estimate of the value added promised by a given investment opportunity. Under very limited assumptions, the NPV of the incremental cashflows implied by a given investment decision when discounted at the firm’s opportunity cost of capital provide the economic value of the project to the firm. With all the usual caveats in place, under free information and competitive markets, this increment in value contingent upon an investment decision should be translated into a corresponding increase in the market value of the firm. However, theory is one thing, practice another, and it is to the data requirements of the FAP model that we now turn our attention.

Suggested Citation

  • Frank Lefley, 2015. "The FAP Model — Basic Data," Palgrave Macmillan Books, in: The FAP Model and Its Application in the Appraisal of ICT Projects, chapter 6, pages 92-99, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-44352-6_6
    DOI: 10.1057/9781137443526_6
    as

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