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Corporate Finance | Investment Appraisals

Business Valuation | Company Restructuring | Debt Finance | Due Diligence | Financial Strategies | Financing Decisions | Investment Appraisals

Undoubtedly, every business manager will postulate on whether or not his or her organization should take up a proposed investment in a new venture or project. There is always the principle that the management should invest in ventures that add to the value of their shareholders’ shares. Traditionally, the project’s payback period and its book rate of return would have determined whether the project should be taken up or not. Modern Finance Theory ropes in another important aspect namely the time-value of money which basically states that a pound today is worth more than a pound tomorrow because it can be invested to start earning interest immediately. Therefore, any investment appraisal method that does not recognize and fuse in the time-value of money cannot be sensible. MGI Malta can assist you in evaluating the net present value of the investment proposal by determining the appropriate opportunity cost of capital that reflects both the time value of money and the risks involved, to ultimately discount the future cash flows of the projects in mind. This should result in a more educated decision as to whether to invest in the venture or not.