Evaluating the Capacity of Standard Investment Appraisal Methods

Mehari Mekonnen Akalu ()
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Mehari Mekonnen Akalu: Erasmus University Rotterdam

No 02-082/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: The survey findings indicate the existence of gap between theory and practice of capital budgeting. Standard appraisal methods have shown a wider project value discrepancy, which is beyond and above the contingency limit. In addition, the research has found the growing trend in the use of value management models. The presence of correlation between the frequency of monitoring and project value discrepancy, and the absence of uniformity in the use of evaluation methods throughout the life span of a project are among the results of the study.

Keywords: Capital Budgeting; Investment Appraisal; DCF Methods; Project Analysis; Shareholder Value Analysis; Value Management Techniques. (search for similar items in EconPapers)
JEL-codes: G30 G31 L6 L8 L9 M10 O22 O32 (search for similar items in EconPapers)
Date: 2002-08-20
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