Luận Văn the development of capital investment appraisal methods with reference to their use in the vietnames

the development of capital investment appraisal methods with reference to their use in the vietnamese banking industry

Capital investment decisions are of high importance to any business because they involve commitment of key resources and have an impact on the firm’s long-term performance as well as the shareholders’ wealth. Therefore, finding reliable methods for measuring the potential value of capital investment proposals is a matter of concern for not only managers but also shareholders of a firm (Akalu and Turner, 2002). To date, various investment appraisal methods have been developed to assist management in this task.
The most popular appraisal methods, which have been extensively discussed in literature as well as widely applied in practice, are the traditional methods, namely Accounting Rate of Return (ARR), Payback Period, Internal Rate of Return (IRR) and Net Present Value (NPV) (Akalu and Turner, 2002). Despite their usefulness, the traditional appraisal methods have also been criticised on a number of grounds. Therefore, several new appraisal methods have been developed recently to deal with the problems of the traditional ones.
Nevertheless, there appears to be a need for a research which provides a comprehensive review of the appraisal methods developed so far to assist management in making capital investment decisions. Furthermore, whilst a large amount of research has identified and analysed the problems of the individual traditional investment appraisal methods, there is a modest amount of literature recognising their common problems.