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It is important to use various methods for evaluating investment proposals. Some methods you can use is to research what the investment is currently worth, and how long it will take to mature. Take this information to help you determine if your money would be better used in other ways.

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Q: Various methods used for evaluating investment proposals?
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What is Pay back period method?

Method of evaluating investment opportunities and product development projects on the basis of the time taken to recoup the investment. This period is compared to the required payback period to determine the acceptability of the investment proposal. In contrast to return on investment and net present value methods, the cash inflows occurring after the payback period are not included in this method. Formula: Payback period (in years) = Initial capital investment ÷ Annual cash-flow from the investment.


What are the methods and procedures used in procurement?

There are many methods and procedures in procurement. Some of these methods and procedures include open tendering, restricted tendering, two page tendering, and request for proposals.


What is Capital budgeting is primary concerned with?

Management of fixed capital, capital budgeting decision or investment decision is the process of long range planning involving investment of funds in various long term activities whose benefit are expected over a series of year .Need of Capital budgeting Decisionthese decisions affects the long term growth & survival of business,these decision have long term implication for the enterprises because the effect of investment decision extend in to the futurethese decision involve large investment in various long term asset , thus planned after careful evaluation of various projectinvolve risk & uncertainty associated with the future cash flow of the project,since the actual cash flow may not match expected cash flow the rate of earning may fluctuate & he firm may become more riskydecision once taken cannot be easily reversible without incurring heavy losses , these decisions are very important for any organizationSteps in capital Budgeting :project planningproject evaluationproject selectionproject implementationproject controlproject reviewCapital Budgeting Techniques for Analysis of projects :A . Discounting technique (use time value of money ) Methods :Net present valueprofitability indexInternal Rate of returnModified internal rate of returnDiscounted payback periodNet present value indexB . Non- Discounting Technique (ignores time value of money ) Methods :Payback periodAccounting rate of return or average rate of return


What is hedge funds?

Well there are a couple of different ways you could define it... 1. (a flexible investment company for a small number of large investors (usually the minimum investment is $1 million); can use high-risk techniques (not allowed for mutual funds) such as short-selling and heavy leveraging) 2. an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee too its investment manager . and more...


Construction of portfolio for collective investment?

A Collective Investment is more, really, a "vehicle" than a portfolio -- so in short you could construct a portfolio in a myriad of ways -- Think of it this way, you may be familiar with mutual funds. Mutual funds invest in all kinds of things with all sorts of different portfolio construction strategies and methods. There are money market mutual funds and stock funds and other conservative to aggressive funds. A mutual fund is one way of setting up, legally, the form of the investment portfolio, not the strategy of the portfolio. This is also the case with Collective Investment (Funds), which are legally organized in a different manner than mutual funds or partnerships. hope that helps

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What is Pay back period method?

Method of evaluating investment opportunities and product development projects on the basis of the time taken to recoup the investment. This period is compared to the required payback period to determine the acceptability of the investment proposal. In contrast to return on investment and net present value methods, the cash inflows occurring after the payback period are not included in this method. Formula: Payback period (in years) = Initial capital investment ÷ Annual cash-flow from the investment.


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