In this guide
14 · Evaluate an investment project
Compare the cost, cash and risk of an equipment or business project in the same table.
Put it into practice
- List initial and ongoing costs
- Estimate incremental cash flow under several scenarios
- Compare alternatives and decide review criteria
Further reading: Investor.gov · Yatırım eğitimi ↗
Evaluate a project under a downside case
A fictional equipment project costs 5,000 and is assumed to generate net incremental cash of 250 per month. Simple payback is 20 months, ignoring timing, financing, tax and residual value. At 125 per month it becomes 40 months.
Your worksheet
Initial spending; incremental receipts; additional costs; capacity; downside assumptions; evidence.
Check your work
Simple payback is only one measure. Identify what has been excluded before using it to support a decision.
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