Chapter 16. Investment ratios

IntroductionProject appraisal – the problemProject appraisal – steps to a solution (1)Project appraisal – steps to a solution (2)Project appraisal – present value (PV)Project appraisal – internal rate of return (IRR)Project appraisal – summary


The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.

 --JOHN MAYNARD KEYNES (1883–1946)


The need for a company to earn a return on its investment has been covered in detail. It is clear that this return must meet market expectations if the standing and value of the company is not to suffer.

One of management’s critical functions is planning the future of the business to ensure ...

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