Investment appraisal criteria underlying investment decisions

Roxana Corina Caruntu

Annals - Economy Series, 2011, vol. 3, 189-194

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.

Keywords: investment; net present value; internal rate of return (search for similar items in EconPapers)
Date: 2011
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