Business Finance is often associated with the maximisation of shareholder wealth and consideration of other stakeholder perspectives. Investors are constantly concerned about the future returns available and investment appraisal techniques have evolved to try and determine future outcomes from potential investments to assist management in decision making.
You are required to critically evaluate the different methods of investment appraisal and consider if these methods are suitable for an ever changing business environment and whether they meet the needs of both investors and the wider stakeholder community.
You should use examples to illustrate your points and a wide range of support from academic literature is also expected.
THE THREE METHODS OF INVESTMENT TO BE USED ARE:
1) Accounting Rate of Return (ARR)
2) Payback Period (PP)
3) Net Present Value (NPV)
ALSO analyse/explore/compare ALL THREE.