Professional Development Programme on Enriching Knowledge of the
Business, Accounting and Financial Studies (BAFS) Curriculum
Course 1 : Contemporary Perspectives on Accounting
Unit 10 : Capital Investment Appraisal
Technology Education Section, Curriculum Development Institute
Education Bureau, HKSARG
August 2008
Learning objectives
On completion of this unit, you should be able to:
1.
2.
3.
4.
Explain capital investment decisions.
Apply the basic capital investment appraisal methods
to evaluate capital projects: accounting rate of return
(ARR), payback period (PB), net present value (NPV);
and internal rate of return (IRR).
Compare the usefulness and limitations of different
capital investment appraisal methods.
Evaluate non-financial factors affecting capital
investment decisions.
2
Content
1.
2.
3.
4.
5.
6.
7.
8.
Introduction
Different types of capital investment decisions and
risks
Non-financial factors affecting capital investment
decisions
Financial factors affecting capital investment decisions
Traditional capital investment appraisal techniques
Capital investment appraisal techniques using
discounting cash flow method
Recapitulation
Further Readings
3
Organisation of Unit 10
Capital Investment Appraisal
Types of capital investments:
Internal capital investments
External capital investments
Factors affecting capital investment decisions:
Non-financial factors
Financial factors
Capital investment appraisal techniques
Traditional techniques:
Accounting rate of return,
Payback period
Advantages and disadvantages
Discounted cash flow techniques:
Discounted payback period,
Net present value,
Internal rate of return
Advantages and disadvantages
4
1. Introduction
(1)
Capital investment refers to large
expenditures made to acquire long-term
assets.
Capital budgeting refers to the
process of evaluating and prioritizing
capital investment opportunities and
deciding which investments in longterm assets are taken.
The final list of approved investments
is the capital budget.
5
1. Introduction
(2)
Cost of capital - the rate of return the company is
paying to its long-term investors for the use of their
money.
Three main factors for capital investment decisions:
i) the investors’ belief about the future of the business;
ii) the investors’ attitude to bear the risk of loss; and
iii) the selection of the best alternatives to invest.
Link to Takee BBQ Case
Activity.
Refer to the Takee BQQ Case, describe the three
main factors affecting the capital investment
decisions of the owner.
Answer on next page
6
1. Introduction
(3)
Answer
The three main factors affecting the capital investment
decisions of the owner of Takee BBQ are:
1. the owners’ mission to set up twenty chain stores within
two years with a vision that the business will be
prosperous;
2. the investors’ attitude towards their risk that people prefer
cooking their food at home rather than buying take-out
food when the economy is not favourable does not affect
the owner’s decision to expand; and
3. the owner will select different models of BBQ grilling
machines depending on the cost of capital available in the
financial market and the sales demand.
7
2. Different types of capital
investment decisions and risks (1)
A. Internal capital investment involves
purchasing plant and machinery,
research and development and
advertising.
Two types of internal capital investment
decisions are:
a) Replacement of long-term assets
i) for maintenance of business
ii) for cost reduction
b) Addition of long-term assets
i) for expansion of existing products
ii) for expansion into new products
Guess an example for each of the four
cases above.
Click here for answer
8
2. Different types of capital investment
decisions and risks (2)
2A. Worksheet
a) Replacement of long-term assets
i) for maintenance of business, e.g. __________________
ii) for cost reduction, e.g. ____________________________
b) Addition of long-term assets
i) for expansion of existing products, e.g. ______________
ii) for expansion into new products, e.g. ________________
Answer on next page
9
2. Different types of capital
investment decisions and risks (3)
2A. Answer
a) Replacement of long-term assets
i) for maintenance of business, e.g. to replace a damaged
/ worn out machine in production
ii) for cost reduction, e.g. to replace serviceable but
obsolete equipment to minimise scraps in production
b) Addition of long-term assets
i) for expansion of existing products, e.g. to buy new
machines to increase volume of production
ii) for expansion into new products, e.g. to buy new
machines to produce in new products
10
2. Different types of capital
investment decisions and risks (4)
B. External capital investment involves joint
ventures, takeover and merger.
C. Divestment includes cutting unprofitable
segments, selling old plant and machineries
or selling subsidiaries.
Give an example for each of the two types above.
Click here for answer
11
2. Different types of capital investment
decisions and risks (5)
2 B&C. Worksheet for answer
B. External capital investment involves joint ventures
and takeover and mergers, e.g. ____
______________________________.
C. Divestment includes cutting unprofitable segments,
selling old plant and machinery or selling
subsidiary companies, e.g. __________
_______________________.
Answer on next page
12
2. Different types of capital investment
decisions and risks (6)
2 B&C. Answer
B. External capital investment involves joint ventures
and takeover and merger, e.g. Sony and Ericsson
joined together to form Sony Ericsson.
C. Divestment includes cutting unprofitable segments,
selling old plant and machineries or selling
subsidiaries, e.g. The Housing Authority sold around
180 retail properties and car parking properties to
form the “Link Real Estate Investment Trust”.
13
2. Different types of capital
investment decisions and risks (7)
2D. Risks in capital investment
Risks vary with capital investment
types:
i) Replacement of long-term assets
- safest
ii) Addition of long-term assets
- riskier
iii) New venture - riskiest
14
3. Non-financial factors affecting
capital investment decisions (1)
Non-financial factors - factors not measured against the
financial requirements established for acceptable
capital investments
Examples of non-financial factors are:
i) environmental concerns which affect corporate image;
ii) better working conditions which affect product quality;
iii) healthier employees result in higher employee morale;
iv) accommodating working parents to enhance flexible
working schedule.
Provide an example of investment
proposal for each of the cases above.
Click here for answer
15
3. Non-financial factors affecting
capital investment decisions (2)
3. Worksheet for answer
Examples of non-financial investment proposal:
i)
improving working environment which affects corporate
image;
ii) ____________________ which affects product quality;
iii) ____________________ results in higher employee morale;
iv) ____________________ enhances flexible working
schedule for employees.
Answer on next page
16
3. Non-financial factors affecting capital
investment decisions (3)
3. Answer
Examples of non-financial investment proposal:
i)
improving working environment which affects corporate
image;
ii) improving working condition in factory which affects
product quality;
iii) setting up an employee club results in higher employee
morale;
iv) arranging interest classes for kids enhances flexible
working schedule for employees.
17
4. Financial factors affecting capital
investment decisions
Financial factors:
i) expected cash flows; and
ii) future profitability
18
5. Traditional capital investment appraisal
techniques (1)
Two traditional capital investment techniques
used to compare the attractiveness of competing
investment projects:
A. Accounting rate of return (ARR)
B. Payback period (PB)
19
5. Traditional capital investment appraisal
techniques (2)
A. Accounting rate of return
Accounting rate of return (ARR)
Average annual profit
Investment capital
x 100%
Common bases in estimating investment capital:
i) Initial capital
ii) Average capital
iii) Average net book value
20
5. Traditional capital investment appraisal
techniques (3)
Example (ARR)
Initial investment in capital asset is $100
Useful life is 5 years, straight line depreciation
Scrap value of capital asset is $20
Yr 1
$
Yr 2
$
Yr 3
$
Yr 4
$
Yr 5
$
Average
$
Profit before depreciation
20
40
60
60
20
40
Less: Depreciation
16
16
16
16
16
16
Profit after depreciation
4
24
44
44
4
24
Cost (Initial capital)
100
100
100
100
100
100
Less: Accumulated Depreciation
16
32
48
64
80
48
Net book value (Initial capital less
accumulated depreciation)
84
68
52
36
20
52
21
5. Traditional capital investment appraisal
techniques (4)
Example (ARR)
Calculation of ARR under different capital
investment bases:
Average annual profit
Investment capital
x 100%
Initial capital base:
24 / 100 x 100% = 24%
Average capital base:
24 / (100 / 2) x 100% = 48%
Average net book value base:
24 / 52 x 100% = 46%
22
5. Traditional capital investment appraisal
techniques (5)
Activity in Case Study
Refer to the Takee BBQ Case,
Which capital investment base is adopted by
Takee for calculating the ARR?
The answer is ____________________.
Answer on next page
23
5. Traditional capital investment appraisal
techniques (6)
Answer (Case Study)
Refer to the Takee BBQ Case,
Which capital investment base is adopted by Takee for
calculating the ARR?
The answer is average net book value.
24
5. Traditional capital investment appraisal
techniques (7)
Advantages and disadvantages of ARR
Advantages:
1. Simple to calculate.
Disadvantages:
1. Ignore the timing of cash flows generated.
2. Indicate accounting profit only.
3. No universally acceptable method in calculating ARR.
25
5. Traditional capital investment appraisal
techniques (8)
B. Payback period (PB)
Payback period (PB) is the expected number of
years required for a project’s planned cash flows to
cover up the initial investment.
The usual decision is to accept the project with the
shortest payback period.
26
5. Traditional capital investment appraisal
techniques (9)
B. Example (PB)
Project A
Project B
Project C
Year Cash flow Cumulative Cash flow Cumulative Cash flow Cumulative
Cash flow
Cash flow
Cash flow
$
$
$
$
$
$
0 -3,600 -3,600
-3,600
-3,600
-3,600
-3,600
1 +1,000 -2,600
+1,000
-2,600
+1,000
-2,600
2 +1,200 -1,400
+1,000
-1,600
+1,000
-1,600
3 +1,400
NIL
+1,100
-500
+800
-800
4
+1,000
+500
+1,000
+200
5
+500
+700
6
+300
+1,000
Payback
3 years + (500/1,000) years 3 years + (800/1,000) years
= 3.50 years
= 3.80 years
period:
= 3 years
27
5. Traditional capital investment appraisal
techniques (10)
Exercise (PB)
Calculate the payback period for the following cash
flows:
Year
Cash flow
0
1
($200,000) $60,000
2
3
4
$60,000 $60,000 $60,000
Payback period = ? years
Click here for answer
28
5. Traditional capital investment appraisal
techniques (11)
Answer (PB)
Payback period is
3 years + (20,000 / 60,000) years = 3.33 years
29
5. Traditional capital investment appraisal
techniques (12)
Advantages and disadvantages of PB
Advantages:
1. Simple to calculate.
2. Used as a screening device to eliminate obviously
inappropriate projects.
3. Indicate a project’s liquidity rather than profit.
4. Tend to in bias of short-term projects – to minimise
both financial risk and business risk for unstable
companies.
5. Used in capital rationing situation to identify those
projects which generate additional cash for
investment quickly.
30
5. Traditional capital investment appraisal
techniques (13)
Advantages and disadvantages of PB
Disadvantages:
1. Ignore the time value of money.
2. Ignore cash flows after the payback period.
3. Unable to distinguish between projects with the same
PB.
4. May lead to excessive investment in short-term
projects.
5. Ignore the possible variability of those cash flows.
Next page
31
5. Traditional capital investment appraisal
techniques (14)
Exercise (PB)
You have to choose between two mutually exclusive projects A
and B with the same amount of initial investment.
Cash flow at
Year i (Ci)
Project A
$
Project B
$
C0
(1,500)
(1,500)
C1
500
500
C2
500
500
C3
500
300
C4
300
800
C5
300
800
Payback period:
______ years
______ years
Click here for answer
32
5. Traditional capital investment appraisal
techniques (15)
Answer (PB)
• PB for Project A is 3 years
• PB for Project B is 3 years + 2/8 years = 3.25 years
Further discussion:
Using the PB decision rule, you will choose Project A.
• However, Project B is clearly the better alternative
because of the greater total cash inflows over the life
of the project. Will that affect your decision?
Back to exercise
33
6. Capital investment appraisal techniques using
discounted cash flow method (1)
Investment appraisal is concerned with
long-run decisions where revenue and
costs arise at intervals over a period.
Since monies spent or received at different
times cannot be compared directly, future
cash flows are discounted to their present
value by a particular rate at a common date.
Two features of discounted cash flow
techniques:
i) use of cash flows; and
ii) taking into account the time value of
money.
34
6. Capital investment appraisal techniques using
discounted cash flow method (2)
Time value of money
The impact of capital investments will generate cash inflows for a
long period of time, e.g. buying a machine to produce products
to generate cash upon selling these products in the future.
For making comparisons involving time element, an appreciation
of the concept of time value of money is crucial.
Generally speaking, saving or investing a dollar instead of
spending it today results in a future amount greater than a dollar,
since interest or income will be earned on money not spent
today.
35
6. Capital investment appraisal techniques using
discounted cash flow method (3)
Time value of money perspective can be appreciated via:
A. the concept of future value and the compounding
technique
B. the concept of present value and the discounting
technique
36
6. Capital investment appraisal techniques using
discounted cash flow method (4)
A. Future value and compounding technique:
Future value (FV) refers to an amount to which
current saving will increase based on a certain
interest rate and a certain time period; the process of
growth is known as compounding.
Compounding is a process of accumulating value
over time, from a single money amount
(deposit/payment) or a series of equal
deposits/payments (annuity).
37
6. Capital investment appraisal techniques using
discounted cash flow method (5)
Example (future value)
What is the future value of $1,000 put in a one-year
time deposit at an annual interest rate of 5%?
Answer (future value)
Future value
= $1,000 + ($1,000 x 5%)
= $1,050
38
6. Capital investment appraisal techniques using
discounted cash flow method (6)
B. Present value and discounting technique
Present value (PV) refers to the current value of a future
amount based on a certain interest rate and a certain
period.
Discounting is a process of reducing future value to
present value. It is used to determine the current value
of a desired amount for the future.
The technique for calculating PV in capital investment
appraisal is generally referred to as the discounted cash
flow (DCF) method.
39
6. Capital investment appraisal techniques using
discounted cash flow method (7)
Example (DCF)
Peter will have a 10% return per
annum for money deposited with a
financial institution.
What is the amount required to be
deposited now in order to receive
$10,000 at the end of one year?
Click here for answer
40
6. Capital investment appraisal techniques using
discounted cash flow method (8)
Answer (DCF)
Let z be the money deposited at present:
z x (1+10%) = $10,000
z = $10,000 / (1 + 10%)
z = $9,090.9
In the above calculation, 1 / (1 + 10%) is a discount
factor to convert $10,000 into a present value of
$9,090.9.
41
6. Capital investment appraisal techniques using
discounted cash flow method (9)
Exercise (DCF) (Cont’d)
At the 10% discount rate, what would be the discount
factor at the end of 2nd year, 3rd year and 4th year?
(Refer to present value interest factors table in Appendix 1)
Click here for answer
42
6. Capital investment appraisal techniques using
discounted cash flow method (10)
Appendix 1: Extract of present value interest factors table
(PVIF i, n)
Present Value of $1 Due at the End of n Periods (PVIF i, n)
Interest (i)
Period (n)
1%
1
…………..
9%
10%
0.9901
0.9174
0.9091
2
0.9803
0.8417
0.8264
3
0.9706
0.7722
0.7513
4
0.9601
0.7084
0.6830
5
0.9515
0.6499
0.6209
6
0.9420
0.5963
0.5645
43
6. Capital investment appraisal techniques using
discounted cash flow method (11)
Answer (DCF) (Cont’d)
The present value interest factors PVIF (10%, n) are:
Year 1
Year 2
Year 3
Year 4
0.9090
0.8264
0.7513
0.6830
44
6. Capital investment appraisal techniques using
discounted cash flow method (12)
Three major DCF methods
A. Discounted payback period (DPB)
B. Net present value (NPV)
C. Internal rate of return (IRR)
45
6. Capital investment appraisal techniques using
discounted cash flow method (13)
A. Discounted payback period (DPB)
• Use the project’s cost of capital to discount the expected cash flow.
• Apply payback period on the discounted cash flow
Year
Yr 1
$
Yr 2
$
Yr 3
$
Yr 4
$
Cash flow at the end of
year
-100
10
60
80
Discounted cash flow
-100
9.09
49.59
60.11
Cumulative discounted
cash flow
-100
-90.91
-41.32
18.79
Discounted payback
period
2 years + (41.32 / 60.11) years = 2.7 years
46
6. Capital investment appraisal techniques using
discounted cash flow method (14)
Advantages and disadvantages of DPB
Advantages:
1. Used as a screening device to eliminate obviously
inappropriate projects.
2. Indicate a project’s liquidity rather than profit.
3. A more exact calculation on the time value of cash inflows
than just the nominal value.
4. Tend to bias in favour of short-term projects – to minimise
both financial risk and business risk for unstable companies.
5. Used in a capital rationing situation to identify those projects
which generate additional cash for investment quickly.
47
6. Capital investment appraisal techniques using
discounted cash flow method (15)
Advantages and disadvantages of DPB
Disadvantages:
1. Ignore cash flows after the payback period.
2. Unable to distinguish between projects with the same
DPB.
3. May lead to excessive investment in short-term projects.
4. Ignore the possible variability of those cash flows.
DPB solves one problem of using payback period for
capital investment appraisal. What is it?
By taking into account the time value of money, DPB gives
more accurate results.
48
6. Capital investment appraisal techniques using
discounted cash flow method (16)
B. Net Present Value (NPV)
The project’s cash flows are discounted to its present
value at the cost of capital
NPV = CF0 + CF1 /(1+ k)1 + CF2 /(1+ k)2 + …… + CFn /(1+ k) n
n
= Σ CFt /(1 + k) t
t=0
CF is the expected net cash flow in the period,
k is the project’s cost of capital,
0 means year 0 (present) , 1 means end of period 1, etc
49
6. Capital investment appraisal techniques using
discounted cash flow method (17)
Stand-alone and mutually exclusive projects
(a) Stand-alone project - there is no
competing alternative
(b) Mutually exclusive project – choose
only one of the capital investments
and reject others
50
6. Capital investment appraisal techniques using
discounted cash flow method (18)
B. Net Present Value (NPV)
Decision rule:
(i) For stand-alone project:
If NPV > 0 Æ accept
If NPV < 0 Æ reject
(ii) For mutually exclusive project:
If both NPVA and NPVB > 0
and NPVA > NPVB,
choose Project A over Project B
51
6. Capital investment appraisal techniques using
discounted cash flow method (19)
Example (NPV)
Project A is a stand-alone project:
Year 0
Year 1 Year 2 Year 3 Year 4
-$9,500 +$3,000 +$4,700 +$4,800
+$3,200
What is the NPV of Project A if the cost of capital (k) is 20%?
Is the project acceptable?
Click here for answer
52
6. Capital investment appraisal techniques using
discounted cash flow method (20)
Answer (NPV)
NPV = CF0 + CF1 /(1+ k) 1 + CF2 /(1+ k) 2
n
= Σ CFt /(1 + k) t
t=0
+ ……
+ CFn /(1+ k) n
NPV = -$9,500 + $3,000/(1.2) 1 + $4,700/(1.2) 2 +
$4,800/(1.2) 3 + $3,200/(1.2) 4
= $582
Conclusion
Project A is acceptable as it generates cash
more than the present value of capital
investment.
53
6. Capital investment appraisal techniques using
discounted cash flow method (21)
Advantages and disadvantages of NPV
Advantages:
1. Take into account the time value of money
2. Consider total cash flows from the project
3. Use cash flows instead of the arbitrary
accounting profit
Disadvantages:
1. Difficult to determine the appropriate discount
rate (cost of capital)
54
6. Capital investment appraisal techniques using
discounted cash flow method (22)
C.
Internal rate of return (IRR)
IRR is the return on investment or the interest rate
that equates the present value of a project’s
expected cash inflows to the present value of its
expected cash outflows.
IRR may not be calculated directly.
It can be found either by drawing a graph, using a
financial calculator, looking up the Present Value
Interest Factors table (using linear interpolation to
work out calculations) or using Microsoft Excel
program.
55
6. Capital investment appraisal techniques using
discounted cash flow method (23)
Example (IRR)
Project Z is being evaluated for which the cash flows have
been estimated as follows:
Year 0 Year 1
-$9,500 +$4,000
Year 2 Year 3 Year 4
+$4,000 +$4,000 +$4,000
The cost of capital is 20%
What is the IRR for Project Z?
Is the project acceptable?
Next page
56
6. Capital investment appraisal techniques using
discounted cash flow method (24)
Present Value Interest Factors Table Method
IRR is the interest rate that equates the present value of
the project’s cash inflows ($4,000 per year for year 1 to 4)
to its initial investment ($9,500).
Relating the IRR concept to the present value table
method, we can define IRR through the NPV equation,
where IRR is simply the interest rate (k) at which NPV
equals zero (i.e. when the present value of all cash
inflows equals to present value of all cash outflows).
Let NPV
=0
CF0 + CF1 /(1+ k) 1 + CF2 /(1+ k) 2 + …… + CFn/(1+ k) n = 0
57
Next page
6. Capital investment appraisal techniques using
discounted cash flow method (25)
Present Value Interest Factors Table Method
In the above example,
0
= CF0 + CF1 /(1+ IRR)1 + CF2 /(1+ IRR)2 + CF3 /(1+ IRR)3
+ CF4 /(1+ IRR)4
- CF0 = CF1 /(1+ IRR)1 + CF2 /(1+ IRR)2 + CF3 /(1+ IRR)3
+ CF4 /(1+ IRR)4
Since CF1 = CF2 = CF3 = CF4 = $4,000, the annuity equation can be
used to solve for IRR: PVA = PMT (PVIFA i, n)
where PVA is present value annuity, PMT is periodic payment
Initial investment
Outlay (= CF0)
PVIFA i, n
PVIFA i, 4
=
=
=
=
Present value of the projects
expected net cash inflows
Next page
Investment outlay/PMT
$9,500/$4,000 = 2.375
58
6. Capital investment appraisal techniques using
discounted cash flow method (26)
Present Value Interest Factors Table Method
This is a PVIFA for 4 years, using the table in Appendix 2, we find i to be
between 24% (2.4043) and 28% (2.2410).
(a) Looking up the PVIFA (i, n) table in Appendix 2, we find that the
present value of 24% is $117 i.e. 2.4043 x $4,000 - $9,500.
(b) The present value of 28% is -$536 i.e. 2.2410 x $4,000 - $9,500.
(c) The difference of NPV between (a) 24% and (b) 28% is $653 i.e. $117
+ $536.
Conclusion
By using linear interpolation method,
Project
is acceptable
as the IRR, 24.72%
exceeds the
IRR =Z24%
(a) + 4% (117(a)/653(c))
= 24.72%
cost of capital, 20%.
59
6. Capital investment appraisal techniques using
discounted cash flow method (27)
Appendix 2: Extract of Present Value Interest Factor
Annuity table (PVIFA i, n)
Present Value of an annuity of $1 per period for n Periods (PVIF i, n)
Interest (i)
Period (n)
1%
1
…………..
24%
28%
0.9901
0.8065
0.7813
2
1.9704
1.4568
1.3916
3
2.9410
1.9813
1.8684
4
3.9020
2.4043
2.2410
5
4.8534
2.7454
2.5320
6
5.7955
3.0205
2.7594
Back to Question
60
6. Capital investment appraisal techniques using
discounted cash flow method (28)
Decision rule of IRR method
IRR is the interest rate that equals the present value of a
project’s cash inflows to its outflows (i.e. when NPV = 0).
If IRR > cost of capital (k), the rate of return is greater than its
cost. Some return is left over to increase shareholders’
returns.
(a) For stand-alone project:
If IRR > k Æ Accept
Otherwise, reject
(b) For mutually exclusive project:
If both IRRA and IRRB > k, and
Æ choose Project A over Project B;
IRRA > IRRB
If both IRRA and IRRB < k, reject both projects
Click here for answer
61
6. Capital investment appraisal techniques using
discounted cash flow method (29)
Advantages and disadvantages of IRR
Advantage:
IRR is commonly used because its
principle is easily understood.
Disadvantage:
IRR is a relative measure of the return.
It does not reflect the size of the
project and the timing of cash flows.
62
7. Recapitulation
After you have read the above materials, you should be
able to:
1. Understand what is capital investment decision and
capital budgeting.
2. Using non-financial and financial factors to evaluate
capital investments.
3. Calculate accounting rate of return (ARR), payback
period (PB), discounted payback period (DPB), net
present value (NPV) and internal rate of return (IRR).
4. Explain the advantages and disadvantages of different
capital investment appraisal methods.
63
8. Further Readings (1)
1. Lucey, Terry, Management Accounting, 5th Edition,
Chapter 17-18, Investment Appraisal I & II, London:
Continuum, 2003. (ISBN 0-8264-6359-2)
2. Drury, Colin, Management and Costing Accounting, 6th
Edition, Chapter 13-14, Capital Investment Decisions: 1
& 2, London: Thomson, 2004. (ISBN 1-84480-028-8)
3. Brigham, Eugene and Houston, Joel, Fundamentals of
Financial Management, 10th Edition, Chapter 10, The
Basics of Capital Budgeting, Ohio: Thomson 2004.
(ISBN 0-324-20306-3)
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8. Further Readings (2)
• Li, Andy T M and Ng, Patrick P H, Principles of
Accounting, Volume 2, 2nd Edition, Chapter 27,
Investment Appraisal, Hong Kong: Pilot Publishing 2007.
(ISBN 962-397-772-7)
• 王怡心，管理會計，修訂二版，第十一及十二章，資本
預算決策，台北:三民書局〈二○○二年一月〉，第315370頁。 〈ISBN 957-14-3525-2〉
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End of the Unit
End-of-unit Assessment
This is the end of Unit 7.
Please go to the Unit
Assessment before
attempting the next unit.
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If you would like to go through a complete case on capital
investment appraisal, please click me and go to the
Learning Resources Corner for the Takee BBQ Case.
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