O'Reilly logo

Finance for IT Decision Makers - A practical handbook by Michael Blackstaff

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

5 HOW FINANCIAL CASES ARE EVALUATED: PART 1

This chapter and the one that follows it both cover what is really a single topic: how IT and other investment proposals are evaluated. The reason why the topic has been spread over two chapters is to keep chapters to a reasonable length.

OBJECTIVES

When you have studied this chapter you should be able to:

  • describe and contrast, in a business context, the two discounted cash flow (DCF) methods of investment evaluation:
    • net present value (NPV);
    • internal rate of return (IRR);
  • apply the above methods to an IT financial case and explain the significance and limitations of the results;
  • explain how ‘profitability index’ (PI) can be used to compare the profitability of projects from their NPV results; ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required