... to clearer decisions ==> The contractual theory ==> Survival in a competitive world ==> It is better for society ==> They own the firm 3.2 The NPV method that I used is only a starting point to investment decision as there are other methods including payback and accounting rate of return which will aid in the decision making process for investment appraisal. ==> Accounting Rate of Return The ARR is a Ratio of the accounting profit to the investment in the project, expressed as a percentage. The decision rule is that if the ARR is greater than, or equal to, a hurdle rate then accept the project (Arnold) ==> Payback Payback is the length of time for cumulated future cash inflows to equal an initial outflow. Projects are accepted if this time is below an agreed cut-off point. (Arnold) 4. Justifications of the New System 4.1 As you may well know the old system worked, but was very time consuming. ...

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