Is It Still a Good Investment? - Part 1

  • Michael Blackstaff


This and the chapter that follows are really a single chapter divided into two, simply in order to have chapters of a reasonable length. The same practical example that we developed in Chapter 9 is used to illustrate the principles discussed in these two parts. At the end of Chapter 9 we reflected upon whether or not the proposed project whose cash flows we had estimated were a good investment. Invest £1 million, and over four years get your money back, plus £420k. The conclusion we drew was that it looked pretty good; not spectacular maybe, but certainly a better return than could be earned by putting the money in the bank for four years. As you might expect, however, financial people are unlikely to be satisfied with such a woolly-sounding judgement as “pretty good”, and over many years they have developed various numeric methods for evaluating investment opportunities a little more objectively. It is these methods that we shall examine in these two chapters. We shall cover them in a convenient sequence rather than one that reflects their order of importance. Their relative importance will become apparent.


Interest Rate Discount Rate Cash Flow Discount Factor Real Term 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer-Verlag London Limited 2001

Authors and Affiliations

  • Michael Blackstaff

There are no affiliations available

Personalised recommendations