8 INVESTMENT APPRAISAL
After studying this chapter, you should:
- understand what is meant by the time value of money;
- be able to carry out a discounted cash flow analysis to assess the viability of a proposed investment proposal;
- be able to interpret a discounted cash flow analysis in commercial terms.
8.1 INVESTMENT PROPOSALS
Successful companies are always looking at ways in which they can change and develop. The senior management will be faced with a number of different proposals, ranging perhaps from the development of a new product to establishing a company presence in a new part of the world. The company will only have a limited amount of money of its own available and lenders and investors will only be prepared to offer limited amounts. ...
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