Question

How do you do project appraisal?what are the discounting and non-discounting criteria?​

Answer 1

Answer:

The process of project appraisal consists of five steps and they are – initial assessment, defining problem and long-list, consulting and short-list, developing options, and comparing and selecting project. The process of appraisal generally starts from the initial phase of the project.

Discounted cash flows are cash flows adjusted to incorporate the time value of money. Undiscounted cash flows are not adjusted to incorporate the time value of money. The time value of money is considered in discounted cash flows and thus is highly accurate.

Answer 2

CAPITAL BUDGETING TECHNIQUES / METHODS

The traditional methods or non discount methods include: Payback period and Accounting rate of return method. The discounted cash flow method includes the NPV method, profitability index method and IRR.