An Investment appraisal is the process by which one can assess whether or not an investment in a project is worthwhile. It is a tool used by both private and public sector organisations

Businesses invest to increase their profits by improving their operations, to match supply to demand, to reduce manufacturing costs and to increase productivity and efficiency.

For “Not for Profit” organisations the incentive to invest is driven by the need to improve the efficiency, effectiveness and economy of the organisation to provide “Value for Money”

It is essential that managers with responsibility for investments have an understanding of the methodologies and theories behind investment appraisal.