Financing and Managing Projects, Volume I

CHAPTER 4

Project Appraisal

After going through this chapter, you should be able to

• Identify various techniques of project appraisal

• Appreciate the difference between traditional and modern techniques

• Understand the importance of discounting of cash flows under modern techniques

• Appreciate the differences and commonalities in the modern techniques

• Oversee the computation of IRR

• Appreciate the limitations of IRR/BCR/NPV

• Understand the modified PBP and modified IRR

• Appreciate examples of some projects and project management practice

Key Terms: Appraisal techniques, Cash flows, Discounting, Payback Period, NPV, Benefit Cost Ratio, IRR, Modified Payback period, Modified IRR, Cost of Capital

Having formulated the project proposal ...