Investment Appraisal (or Capital Budgeting) is the decision-making process for investing in long-term assets, major capital investments or expenditures that is to determine and evaluate potential significant in amount of expenses or investments. The Investment Appraisal is usually involving the calculation of each project or asset future profit by period, present value (PV) of the cash flows, pay back the initial cash investment, assessment of risk, and other factors. The formal method of Investment Appraisal techniques: Net Present Value (NPV); Internal Rate of Return (IRR); Profitability Index (PI); Payback Period, etc.
Related Definitions in the Project: The Project Management; Economic Reviews; Project Controls; Project Cost
