Disadvantages Of Investment Analysis

1112 Words5 Pages
Techniques of investment evaluation and its advantages & disadvantages: There are several criteria of evaluation investment proposal and determine if it can be accepted or rejected. Those criteria that can grouped in two types: discounting criteria and non-discounting criteria. Seven ways used for evaluation of investment proposals which are: 1. Urgency Method: Some projects can be more urgent which get priority than the project less urgent. In many situation, it is difficult to determine the degree of urgency because of the lack of an objective. (chandra, 2006) Advantages: • It may not be difficult to find urgent investment. Disadvantages: • It is difficult to determine the degree of urgency of project. 2. Pay-Back Period Method: This method known as payoff and pay out. It uses to determine the…show more content…
It also known as economic analysis. Social cost benefit analysis focus on cost and benefit of the project. The social cost benefit analysis (SCBA) is useful tool that use to measure the impact of project. Social cost benefit analysis (SCBA) help to support the decision makers in defining the policy decisions. The main advantage of SCBA is ability to priories and rank the limited res ource so can realize the maximum benefit of the project or proposal. In other hand, the main shortcoming of SCBA is complexity and difficulty to measure the social cost and benefit. . Social cost benefit analysis (SCBA) help to determine the direct and indirect external effects • Direct effects are the costs and benefits that can directly related to the owners of business or users of the project. • Indirect effects are the costs and benefits that accepted on to the producers and consumers outside the market. • External effects are the costs and benefits that cannot be accept on to any current markets because they relate to

More about Disadvantages Of Investment Analysis

Get Access