Business Finance: Investment Appraisal, Stakeholders, and Models

This report provides a comprehensive overview of business finance, focusing on investment appraisal techniques. It begins by highlighting the role of finance in the modern world and establishing a conceptual framework. The core of the report examines various capital investment appraisal methods, including Payback Period, Accounting Rate of Return, Discounted Cash Flow, and Internal Rate of Return. It also analyzes key stakeholders, both internal and external, and their impact on investment decisions. Furthermore, the report discusses the effects of taxation, inflation, and capital rationing on investment appraisals. It explores value-based management through Shareholder Value Analysis and Economic Value Added, and concludes with an examination of Portfolio Theory and the Capital Asset Pricing Model (CAPM). The report concludes by emphasizing the importance of proper project appraisal, stakeholder considerations, and the use of financial models in making sound financing decisions to maximize shareholder wealth.