Financing and Managing Projects, Volume I

CHAPTER 5

Project Appraisal, Price-Level Changes, Social Cost–Benefit Analysis

After having gone through this chapter, you should be able to

• Appreciate project appraisal in complex situations

• Understand comparison of NPV and IRR

• Overview situations of conflicting results of NPV and IRR and issue of multiple IRRs

• Illustrate situations of independent projects and mutually exclusive projects

• Appreciate the need for adjustment of price-level changes

• Understand the concept of social cost–benefit analysis

• Appreciate adjustment for risk in the project appraisal process

• Overview examples of some projects and project management practices

Key Terms: Reinvestment Rate, Capital Rationing, Mutually Exclusive Project, Independent Project, ...