INVESTMENT APPRAISAL AS A GUIDE TO DECISION MAKING (A Case Study of Zenith Bank Plc, Dugbe, Ibadan)

TABLE OF CONTENTS

Certification. iii

Dedication. iv

Acknowledgementv

Table of Contents. vii

Abstractix

CHAPTER ONE. 1

1.0 Introduction. 1

1.2 Statement of Problem.. 4

1.3 Objective of the Study. 4

1.4 Significance of the Study. 5

1.5 Scope of the Study. 5

1.6 Statement of Hypotheses. 6

1.7 Limitation of the Study. 6

1.8 Plan of the Study. 7

CHAPTER TWO.. 8

2.0 Literature Review. 8

2.1 Introduction. 8

2.2 Capital Investment9

2.3 Classification of Capital Investment Proposals. 10

2.4 Capital Investment Appraisal Techniques:16

2.5 Capital Investment Process. 17

2.6 Some Theoretical Foundation. 20

2.7 Investment Appraisal Techniques. 22

2.8 Capital Investment Decision under Inflationary Condition.32

2.9 Money Cash Flows and Real Cash Flows. 35

2.10 Capital Investment Decision and Capital Rationing. 36

2.11 Project Selection under Capital Rationing. 38

2.12 Rationing with Mutually Exclusive Divisible Projects. 39

2.13 Capital Investment Decision under Risk and Uncertainty. 40

2.14 Capital Investment Decision and Taxation. 42

2.15 Capital Investment Decision under Replacement Decisions. 43

2.16 Evaluation of Replacement Decision. 44

CHAPTER THREE. 48

3.0 Research Methodology. 48

3.1 Introduction. 48

3.2 Sources of Data. 48

3.3 Research Instrument48

3.3 Design of Questionnaire. 49

3.4 Sample of Sampling Technique. 50

3.6 Measurement Technique. 50

3.7 Limitation of the Methodology. 51

CHAPTER FOUR. 52

4.0 Presentation and Analysis of Data. 52

4.1 Introduction. 52

4.2 Analysis of Each Questions Response. 53

4.3 Testing of Hypothesis. 58

CHAPTER FIVE. 66

5.0 Summary, Conclusion and Recommendations. 66

5.1 Summary. 66

5.2 Conclusion. 67

5.3 Recommendations. 67

Bibliography. 69

Appendix. 70

ABSTRACT

The investment decisions of a firm are generally known as the capital budgeting or capital expenditure decisions. An investment decision of a firm is the act to invest its current fund most effectively in longterm assets in anticipation of an expected flow of benefits over a series of years. Investment analysis comprises of diverse importance of the firm such as influencing the firms growth in short and longrun, it affects the risk of the firm; it also involves commitment of large amount of fund which is irreversible or reversible substantial loss. However, in evaluating the investment, the three criteria are involved such as: Estimation of cash flow, Estimation of the required rates of return, Application of a decision rule making the choice.