Język Polski
English
Published
:
2010-06-30
The Reasons for Simple and Discount Investment Appraisal Methods Coexistence
Beniamin Włoszczowski
Abstract
The phenomenon of simple and discount investment appraisal methods coexistence was observed in 1980s while the research conducted in various countries. The discount methods were becoming more popular with big companies and this was the basis for the assumption simple methods are mainly used in small companies since their owner and managers cannot cope with the complicated calculations characteristic of discount methods. Further research confirmed the increasing importance of discount methods. The simple methods, however, were not completely eliminated despite the widespread use of computerized calculation methods and significant rise of the managers' knowledge and competence. The studies show the most of the firms use more than one method. The use by big and small companies of more methods (3, 4 and more), even though there may be some contradictions (indication incompatibility), indicates there is much confusion amongst the managers resulting from the methods and needs maladjustment. Investments in IT and logistics are a good example of the lack of needs adjustment in investment appraisal. Due to immeasurable, qualitative outcomes specific for the projects in the above mentioned fields, financial methods have a very low implementation rate or are not used at all. Projects of social type with qualitative benefits are also difficult to assess with the use of existing methods. The conclusion the re is a need to create a new approach to financial appraisal of qualitative project benefits is self-evident. The rejection of the paradigm of rational expectations acknowledged by modern economics for the sake of imperfect knowledge economics (IKE) is the way to create new models and analysis tools. (original abstract)Keywords:
Investment project, Method of project evaluation, Project evaluationDetails
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Włoszczowski, B. (2010). The Reasons for Simple and Discount Investment Appraisal Methods Coexistence. Zeszyty Naukowe Wyższej Szkoły Bankowej W Poznaniu, 28(28). Retrieved from https://journals.wsb.poznan.pl/index.php/znwsb/article/view/1629