Project appraisal: Difference between revisions
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imported>Doug Williamson (Typo correction. Definitions. Worthwhile.) |
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'' | 1. ''Cash flows - discounted cash flow analysis.'' | ||
The evaluation and selection of projects which are most likely to maximise shareholders' wealth, by the comparative analysis of their expected cashflows. | The evaluation and selection of projects which are most likely to maximise shareholders' wealth, by the comparative analysis of their expected cashflows. | ||
'' | 2. ''Cash flows - discounted cash flow analysis - qualitative & strategic analysis - real options.'' | ||
Similar evaluation techniques taking account of additional factors and considerations - as well as the expected project cashflows - including for example the existence of real options. | Similar evaluation techniques taking account of additional factors and considerations - as well as the expected project cashflows - including for example the existence of real options. | ||
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'''Points to note''' | '''Points to note''' | ||
Note for both | Note for both definitions above that ''projects'' are anything involving expenditures for which the benefits, or some of them, occur at a different time from that of the expenditure or some it. | ||
As well as capital expenditure, included are, for example, acquisitions and disposals, marketing expenditure, advertising, staff training or buying a new coffee pot for a staff refreshment station. | As well as capital expenditure, included are, for example, acquisitions and disposals, marketing expenditure, advertising, staff training or buying a new coffee pot for a staff refreshment station. | ||
It is only | It is only worthwhile devoting time and effort in formal project appraisal for projects involving material amounts of expenditure. | ||
== See also == | == See also == | ||
* [[5Ps of marketing]] | |||
* [[Discounted cash flow]] | |||
* [[Influencing skills]] | |||
* [[Payback]] | |||
* [[Real option]] | * [[Real option]] | ||
* [[Real options valuation]] | * [[Real options valuation]] | ||
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=== Other resources === | === Other resources === | ||
* [[Media:2015_07_July_-_Hidden_treasure.pdf| Hidden treasure, The Treasurer | * [[Media:2015_07_July_-_Hidden_treasure.pdf| Hidden treasure - knowing our options, The Treasurer]] | ||
[[Category:Financial_management]] | |||
[[Category:Planning_and_projects]] | |||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
[[Category:Manage_risks]] | |||
Latest revision as of 23:20, 28 June 2021
1. Cash flows - discounted cash flow analysis.
The evaluation and selection of projects which are most likely to maximise shareholders' wealth, by the comparative analysis of their expected cashflows.
2. Cash flows - discounted cash flow analysis - qualitative & strategic analysis - real options.
Similar evaluation techniques taking account of additional factors and considerations - as well as the expected project cashflows - including for example the existence of real options.
Also known as Project analysis.
Points to note
Note for both definitions above that projects are anything involving expenditures for which the benefits, or some of them, occur at a different time from that of the expenditure or some it.
As well as capital expenditure, included are, for example, acquisitions and disposals, marketing expenditure, advertising, staff training or buying a new coffee pot for a staff refreshment station.
It is only worthwhile devoting time and effort in formal project appraisal for projects involving material amounts of expenditure.
See also
- 5Ps of marketing
- Discounted cash flow
- Influencing skills
- Payback
- Real option
- Real options valuation
- Sunk costs
