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can any one tell me that what are the basic methods for checking the feasibility of new investment? thanks in advance
there are 2 common method used
1. Historic Methods
2. modern methods
Modern methods use discounted cash flows to check the feasibilities of projects
thanks for help but can you please explain both of them. very very thanks
the historic method is used before and easy to understand. it does not count present value of cash flows. examples are Pay Back Period and ARR.
Modern approaches use present value of cash flows. examples are NPV, IRR
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