What you’ll learn4 learning objectivesChoose one objective for a focused lesson, or study the complete topic.10.3.1Investment appraisal concept• The concept of investment appraisal- the need for investment appraisalSyllabus objective10.3.2Payback and ARR• Basic methods: payback, accounting rate of return (ARR)- the meaning, calculation and interpretation of payback and ARR (ARR = (average profit / average investment) × 100)Syllabus objective10.3.3NPV• Discounted cash flow method: net present value (NPV)- the meaning, calculation and interpretation of NPVSyllabus objective10.3.4Investment appraisal decisions• Investment appraisal decisions- quantitative results and their impact on investment decisions- qualitative factors and their impact on investment decisions- comparison of investment appraisal methods, including their limitationsSyllabus objective