Answer to Question #185316 in Management for Alex Baraka

Question

Several methods exist for evaluating investment projects under capital budgeting.

 

           Identify and explain three features of an ideal investment appraisal method

Answer 1

features of an ideal investment appraisal method include:

• Safety of principal. Safety of funds invested is one of the essential ingredients of a good investment programme.
• Liquidity and Collateral value - assets or security should be converted easily into ready cash without affecting its market price.
• Stable income- the income from the investment should be always stable or regular.