Traditional Methods of Appraisal

Abstract

It should be stressed from the outset that to virtually all economists the only plausible way to choose between different investments is to use a ‘discounting’ method of appraisal. In industry at the present time, however, most of the methods used are simple non-discounting methods. The most important of these are:

• (a) the pay-back method;

• (b) the peak-profit method;

• (c) the average-profit method.