Appraisal methods in mutually exclusive development projects: A pragmtic analysis of alterntive technique

Ihuah, PW

Abstract

Appraisal techniques utilisations in mutually exclusive development project alternatives and their analysis are
fundamental, and an inevitable process particularly in the planning, design and implementation of the development
projects. At the same time, it’s provided and promote for decision-making on development projects acceptance or
rejection. The study aim is to investigate the appraisal methods in mutually exclusive development projects, identify when
these methods cease to be appropriate for and the alternative techniques to adopt in such circumstance. Observation and
purposive sampling was used to collect information for two development projects (prefabricating company and rock
crushing company). A pragmatic illustration/analysis which utilise the spread sheets and other relevant functions in the
Microsoft excel software packages were used in the analysis, as well as to sustain and achieve the state purpose of the
study. The findings reveal that the most adopted appraisal methods are: the NPV; IRR; and BCR; and that these methods
use in mutually development project alternatives may cease to be appropriate where there are resources budget constraints.
Further, the findings reveal that the technique that should be practiced under this circumstance is the “Capital Rationing”
approach.
The study reflection is to provide and promote a more understandings, knowledge and best practice to
development projects investors, practitioners, government, decision makers and agencies in the management of mutually
exclusive development projects alternatives in the social, political, environmental and economic system. Further, it should
promote the awareness to relevant stakeholders that the benefits in undertaken more than a development project in the
circumstance of resources constraints was what should not be allowed to be diminished in their goals and objective for
economic growth and development of a country or countries.

Citation

Ihuah, P. (2014). Appraisal methods in mutually exclusive development projects: A pragmtic analysis of alterntive technique. International journal of applied and natural sciences (Online), 3(4), 1-14

• Journal Article Type: Article
• Publication Date: Jul 1, 2014
• Deposit Date: May 30, 2014
• Journal: International Journal of Applied and Natural Sciences
• Print ISSN: 2319-4014
• Peer Reviewed: Peer Reviewed
• Volume: 3
• Issue: 4
• Pages: 1-14
• Keywords: Benefits Costs Ratio (BCR), Budget Constraints, Development Projects, Internal Rate of Return (IRR), ; Mutually Exclusive, Net Present Value (NPV)
• Publisher URL: http:// www.iaset.us
• Additional Information: Funders : International Academy of Science, Engineering and Technology