Question
Investment appraisal is the analysis done to consider the profitability of an investment over the life of an asset, alongside considerations of affordability and strategic fit. True False
Answer
4.5
(182 Votes)
Madison
Expert · Tutor for 3 years
Answer
TrueThe statement regarding investment appraisal properly captures its main constituents and can be deemed as true.
Explanation
## Step 1: Understand the given statement'Investment appraisal is the analysis done to consider the profitability of an investment over the life of an asset, alongside considerations of affordability and strategic fit.' ## Step 2: Recollect the definition of Investment AppraisalInvestment appraisal is a process that helps in determining the attractiveness of an investment. It involves the concepts of time value of money, cash flows that the investment will yield, and the initial and maintenance costs of the investment project. ## Step 3: Compare the given statement with the recollected definition The statement given indeed suggests what the process of investment appraisal primarily involves, which is evaluation of profitability over the life of an asset, considering affordability and strategic fit.