用平均收益率、内部收益率（IRR）、净现值（NPV）、投资回收期等方法评价投资方案的吸引力。投资评估是资本预算的一个组成部分（见资本预算），适用于即使回报不易量化的领域，如人员、市场营销和培训
两种贴现现金流（DCF）技术（另一种是净现值或净现值）用于投资方案的比较评价，其中收益随时间的变化而变化。IRR是指通过投资寿命获得的平均年回报，并用几种方法计算。根据所使用的方法，它可以是存款或贷款的有效利率，或贴现率降低到零的收入流入和流出流的净现值。如果IRR高于预期的投资回报率，那么该项目是可取的。然而，它是一个机械的方法（通常用电子表格公式计算），而不是一致的原则。它可以给出错误的或误导性的答案，特别是在两个相互排斥的项目进行评估。
Evaluation of the attractiveness of an investment proposal, using methods such as average rate of return, internal rate of return (IRR), net present value (NPV), or payback period. Investment appraisal is an integral part of capital budgeting (see capital budget), and is applicable to areas even where the returns may not be easily quantifiable such as personnel, marketing, and training
Average Rate of Return (ARR) Definition:
Method of investment appraisal which determines return on investment by totalling the cash flows (over the years for which the money was invested) and dividing that amount by the number of years
Internal Rate of Return (IRR) Definition:
One of the two discounted cash flow (DCF) techniques (the other is net present value or NPV) used in comparative appraisal of investment proposals where the flow of income varies over time. IRR is the average annual return earned through the life of an investment and is computed in several ways. Depending on the method used, it can either be the effective rate of interest on a deposit or loan, or the discount rate that reduces to zero the net present value of a stream of income inflows and outflows. If the IRR is higher than the desired rate of return on investment, then the project is a desirable one. However, it is a mechanical method (computed usually with a spreadsheet formula) and not a consistent principle. It can give wrong or misleading answers, especially where two mutually-exclusive projects are to be appraised. Also called dollar weighted rate of return
Net Present Value (NPV) Definition:
NPV is the difference between the present value (PV) of the future cash flows from an investment and the amount of investment. Present value of the expected cash flows is computed by discounting them at the required rate of return (also called minimum rate of return)
For example, an investment of $1,000 today at 10 percent will yield $1,100 at the end of the year; therefore, the present value of $1,100 at the desired rate of return (10 percent) is $1,000. The amount of investment ($1,000 in this example) is deducted from this figure to arrive at NPV which here is zero ($1,000-$1,000). A zero NPV means the project repays original investment plus the required rate of return. A positive NPV means a better return, and a negative NPV means a worse return, than the return from zero NPV. It is one of the two discounted cash flow (DCF) techniques (the other is internal rate of return) used in comparative appraisal of investment proposals where the flow of income varies over time
Payback Period Definition:
Time required to recover an investment or loan.
INVESTMENT APPRAISAL
One of the key areas of long-term decision-making that firms must tackle is that of investment - the need to commit funds by purchasing land, buildings, machinery and so on, in anticipation of being able to earn an income greater than the funds committed. In order to handle these decisions, firms have to make an assessment of the size of the outflows and inflows of funds, the lifespan of the investment, the degree of risk attached and the cost of obtaining funds.
The main stages in the capital budgeting cycle can be summarised as follows:
1. Forecasting investment needs.
2. Identifying project(s) to meet needs.
3. Appraising the alternatives.
4. Selecting the best alternatives.
5. Making the expenditure.
6. Monitoring project(s).
Looking at investment appraisal involves us in stage 3 and 4 of this cycle.
We can classify capital expenditure projects into four broad categories:
* Maintenance - replacing old or obsolete assets for example.
* Profitability - quality, productivity or location improvement for example.
* Expansion -
