A COMPENDIUM AND COMPARISON OF 25 PROJECT EVALUATION TECHNIQUES .2. RATIO, PAYBACK, AND ACCOUNTING METHODS

This two-part paper presents 25 different methods and techniques used to evaluate the economic desirability of projects. We categorized thes e 25 methods into 5 types: net present value methods, rate of return m ethods, ratio methods, payback methods, and accounting methods. We pro vide insight into the advantages and limitations of these project eval uation methods by comparing and contrasting them. Many examples are in cluded to illustrate the use of these methods. In Part 1, we examine n et present value and rate of return methods. In Part 2, we examine rat io, payback, and accounting methods. A recap, comparison, and full sum mary of all 25 methods is included at the end of Part 2.