Investment Decision Aiding Model and Tools

Abstract

The aim of this book is to provide an overview of the basic techniques and methods of capital budgeting. It goes further and analyses the use of this methods to appraise a group of investment projects and find the best combination of investments to achieve maximum profit. The following methods are used throughout the book: (1) net present value, (2) internal rate of return, (3) modified internal rate of return, (4) payback period, (5) profitability index (6) net profitability index, (7) annuity method, (8) accounting rate of return, and (9) debt-service coverage ratio. Every method is explained with examples, which are summarized in tables for easier study. At the end of the book there is presented an information system for analysis of investment projects. The aim of the software is to automate the calculations involved in the assessment of projects, especially for finding the optimal combination of investments in a group of project. The software has an easy-to-use interface for entering the input data and making the relevant calculations. The results are presented in both tabular and graphical form.