Miss

INVESTMENT APPRAISAL
ACCOUNTING AND DECISION MAKING TECHNIQUES

INDEX
Introduction …………………………………………………………………………………………3

PART I
1. Concepts ……………………………………………………………………….………………4
1.1. Importance of accounting and decision making...………………………….……………4
1.2. Process of accounting and decision making ……….……………………..…...…………4
1.3. Accounting and decision makingtechniques…..…………………………………………5
2. Investment appraisal should add value to the business organization. Do you agree? Analyze the main discounted cash flow techniques available to management......…………6
PART II
1. Calculations…………………………………………………………………………………..11
2. Which project would your choose?…….………………………….………………………..15
3. Conclusions…………………………...……………………………………………………....16
4. Glosary………………………………...………………………………………………………175. References ……………………………………………………………….…………………...17
6. Bibliography………..………………………………………………………………………....18
INTRODUCTION
In the present day, the world is experimenting important and transcendental economics changes. It might do enterprises analyzing and making decisions about which way to pursue in the businesses.
Accounting and decision making techniques, is a vital tool that everycompany has to implement in the evaluation of projects in order to improve the enterprise, due to results it should help to choose the plenty option to track.
The targets of this methodology are investors, creditors, managers, governmental agencies, labor unions, etc, because the main characteristic of accounting is to afford useful information for decision-making purposes.
The report includes twoparts. The first part talks with reference to importance of accounting and decision making, process of this tactic and, accounting and decision making techniques; as well, it will answer to the question: Do you agree that investment appraisal should add value to the business organization?. The second part is in relation to information for decision making through the four different projects and thecalculations of the unknown letters over these.

PART I

1. CONCEPTS
2.1. Importance of accounting and decision making
Bettner M., Haka S., Meigs R., Williams J., (2002), talk about accounting and decision making as functional information to the enterprise in achieving its goals, objectives, and mission; assessing past performance and prospect directions; and evaluating andrewarding decision-making performance'.
(http://highered.mcgraw-hill.com/sites/0072396881/student_view0/chapter1/ chapter_summary.html)
2.2. Process of accounting and decision making
As discussed by Hoggett, J.R., Edwards, L., & Medlin, J., (2002), there are four focal steps in the decision-making process:
1. 'Recognize each circumstances in which a decision is needed and determine thegoals we desire to achieve.
2. Classify the relevant information required to determine likely accessible
alternatives.
3. Categorize and get information considered necessary to assess the consequences or outcomes of the alternatives.
4. Select a route of action which will accomplish the goals (step 1)'.(http://www.johnwiley.com.au/highered/accounting/aia5e/student-res/study_guide_sampler.pdf)
2.3. Accounting and decision making techniques
The graph below shows the accounting decision making techniques and the three resultant steps of it.

First, the investment appraisal could be a long term decision-making. It is very significant for the target of accounting and decision making techniques due to be capable of accept or reject decisions. furthermore, it is anexclusive ranking for decisions.
Second, the investment appraisal has two diverse alternatives of methods that help to desire the appropriate option that business be able to follow. These are:
* Traditional methods
* Discounted cashflow methods.
Traditional methods have two concepts:
* Accounting rate of return (ARR)
* Payback or payback period.
On the other...