Question

Which method would you recommend for evaluating investment? 

Answer 1

Answer:

Investment Evaluation

Widely used methods of investment analysis are payback period, internal rate of return and net present value. Each provides some measure of the estimated return on an investment based on various assumptions and investment horizons.

When a future investment is examined we compare its cost vs its revenue.

Explanation:

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Answer 2

Investment Evaluation is done as a method of balancing investment risk against expected returns from an investment.

Widely Used Methods:

1. Payback Period In this method, you evaluate your investment by determining the period of time you need to recover the cost of your investment.
2. Internal Rate of Return: This method is used as a measurement system in financial analysis to have an estimate of the profit margins from a potential investment.
3. Net Present Value: This method is used in investment planning and includes analysing the difference between the value of cash inflows and the value of cash outflows over a period of time.