Research on the Ways to Appraise the Investment Based on NPV, Payback Period and IRR

Abstract

Recently, the economy of each country and nation are becoming increasingly influenced by the existence of the coviod-19. As the trend of the economic decline, a large number of manufacturing industries are facing the dilemma as to seize the opportunities of investment aggressively or stay in the situation where they are to keep the market share safely. As a result, it attaches great significance to choosing one investment wisely and cautiously. This paper focuses on the different types of appraisal techniques directly. By giving a specific example of different cash flows of a project, make calculations of various appraisal techniques and make comparisons between each of them. And then make a list of different advantages and shortcomings of investment criteria. The main findings of this paper are that among several appraisal techniques, the method of NPV can be the best one to apply when the project managers or investors have gained a large amount of experience and have a more aggressive mind and with the differences of the investment criteria, investors have to consider both the liquidity and profitability. At the end of this paper, the study makes slight advice on choosing the investment projects, making the investment decision more effective and acceptable.