8.5 Financial Concepts and Methods of Appraisal (a)

By the end of this lesson you will have learned about: Money and time Methods of investment appraisal Total cost of ownership (Accounting rate of return – ARR) optional Payback period     1. Money and time The future is uncertain One of the more difficult aspects in understanding the economic implications of decisions is […]


  1. Swan, J. 2005. Practical Financial Modelling. CIMA Publishing.
  2. Failure to do this in models used to assess the risks of complex financial products are considered to have been a contributory factor to the global financial crisis.
  3. For an explanation of the Monte Carlo method see: https://en.wikipedia.org/wiki/Monte_Carlo_method
  4. Empire State Building website: https://www.esbnyc.com/esb-sustainability/project
Lesson tags: capital cost, CarbonLite Retrofit, discounted cash flow, internal rate of return, marginal cost, net annual cost, net present value, sensitivity analysis
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