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CAPITAL INVESTMENT APPRAISAL TECHNIQUES: A SURVEY OF CURRENT USAGE
Author(s) -
Sangster Alan
Publication year - 1993
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1993.tb00258.x
Subject(s) - capital budgeting , cash flow , investment (military) , rate of return , discounted cash flow , selection (genetic algorithm) , return on investment , business , economics , econometrics , actuarial science , accounting , finance , computer science , microeconomics , project appraisal , law , artificial intelligence , production (economics) , politics , political science
This paper seeks to show that organisational change, fuelled by the expansion of information technology, may have contributed to the erosion of the previously established relationship between company size and the quantitative investment appraisal criteria selected. It finds that companies are using more methods together, that usage of the more sophisticated discounted cash flow techniques is higher, and that usage of the less theoretically sound accounting rate of return technique is lower, than previous studies would have suggested for companies of the size involved. It suggests that the size/method selection relationship may only be identifiable when the companies involved are all part of one study, or the studies compared are contemporaneous.