The paper "Coventry University - Benefits of Waste Recycle" is a perfect example of a finance and accounting case study. Investment appraisal involves deciding on the best investment or project to pursue. This is an important activity since it requires a commitment of huge amounts of funds. There can be many viable projects that an investor can pursue. However, the capital available may not be enough to pursue all the viable projects immediately. This indicates that the investor has a task of deciding on the project that will be best in terms of profitability and cost minimization.
The investor will only pursue a project that gives high positive returns compared to the rest. The approaches available for the determination of these returns are the ones we call project investment appraisal techniques. The main objective of these approaches is to make the investor decide on whether or not to undertake a project. However, each of the approaches is suitable for different circumstances. This may be due to the availability or unavailability of certain factors. Similarly, the choice of which approach to use will be based on the advantages offered over the other factors.
Most advisors will, however, recommend the net present value approach as the best approach. This will be discussed further in the article (LANGDON 2002). The article focuses on Coventry University in trying to explain the benefits of waste recycling. It closely analyzes the importance of basing your project investment appraisal on net present value rather than using the other techniques. It gives answers to four basic questions; calculation of net present value and the interpretation, the importance of using net present value approach in project investment appraisal, the importance of energy accounting, and finally the benefits accruing to Coventry University for taking part in the recycling project. Net Present Value of a project is the discounted difference between cash inflows and cash outflows.
It is determined for lump sum amounts as well as annuity amounts. It is a method based on the opportunity cost and the value-added on the wealth of shareholders by undertaking one project and foregoing another one.
HOPKINSON, M. (2017). Net present value and risk modelling for projects. Retrieved from: http://www.worldcat.org/oclc/921994967
LANGDON, K. (2002). Investment appraisal. Oxford, England, Capstone Pub. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=71295.
LIBRARY OF CONGRESS, & GUSHEE, D. E. (1976). Energy accounting as a policy analysis tool. Washington, U.S. Govt. Print. Off.