Project appraisal: Difference between revisions
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Also known as ''Project analysis.'' | |||
Note for both definitons 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. | Note for both definitons 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. | ||
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* [[Sunk costs]] | * [[Sunk costs]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
Revision as of 20:01, 27 January 2015
1.
The evaluation and selection of projects which are most likely to maximise shareholders' wealth, by the comparative analysis of their expected cashflows.
2.
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.
Note for both definitons 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 worthwile devoting time and effort in formal project appraisal for projects involving material expenditure.
