Investment is the process of purchasing fixed assets in order to increase capacity / productivity

Investment appraisal techniques aim to assess the financial feasibility of investment options

Investment appraisal techniques are based on a number of assumptions which may not be true

Payback method looks at how long it will take to pay back the cost of the initial investment

Average rate of return looks at the percentage rate of return on the investment

Discounted cash flow (NPV) looks at the present values of any future revenues from the investment

Qualitative factors affect investment decisions including corporate image, objectives, industrial relations and environmental and ethical reasons