Utilization of Investment Appraisal Techniques by Large-Scale Businesses in Lagos State, Nigeria

Abstract

The study was carried out to investigate the utilization of investment appraisal techniques by large-scale businesses in Lagos State. Two research questions guided the study. The study adopted descriptive survey research design. The population for the study was 150 portfolio managers of large-scale businesses (both banking and insurance organizations) from the three senatorial zones of Lagos State. Due to the manageable size of the population, the entire 150 portfolio managers were involved in the study; therefore, there was no sampling. The instrument for data collection was a well structured 30-item questionnaire. The questionnaire was face validated by three experts. The data for the study was collected by the researcher with the help of three well trained research assistants. The data collected for the study was analyzed using mean and standard deviation for answering the research questions while t-test statistics and Analysis of Variance (ANOVA) were used for testing the hypothesis. Based on the data analyzed, the findings of the study showed that portfolio managers of large-scale businesses in Lagos State were not adequately utilizing non-discounted and discounted cash flow techniques analysis approaches for their investment appraisal in the State. Based on the findings, the study recommended that adequate and effective utilization of investment appraisal techniques should be ensured by management of large-scale businesses such as banks and insurance companies for economic success of the sub-sector and that Portfolio managers of businesses should be continuously made to undergo in-service training in investment appraisal techniques for proficiency on their jobs.