IndexExecutive Summary……………………………………….…2Investment Evaluation Techniques……………… ………………. .2 Reimbursement ……………..……………..3 Accounting Rate of Return (ARR)……………………………..…4Net Present Value (NPV)……………… . …….5 Internal rate of return (IRR)…………………………….6 The decision to use investment valuation……………… ……….7Conclusion…………………. .…………….7References……………. ………………….8SummaryIn this assignment, four widely used investment evaluation techniques will be presented. They are all unique in their own way in today's financial world. Investment Valuation Techniques Payback is a simple technique for valuing an investment based on how long it will take to pay it off. It has always been the default option for smaller businesses more keen to focus on cash flow rather than just profit. The accounting rate of return (ARR) compares the profits you expect to earn from an investment to the amount you need to invest. ARR is often calculated as the expected average annual profit over the life of an investment project, relative to the average amount of invested capital. Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of a planned investment or project. The internal rate of return (IRR) is a metric that is applied in measuring the capital for earning potential investments. The internal rate of return is a discount rate that makes the NPV of all cash flows from a particular project equal to zero. IRR calculations are based on the same formula as NPV.Payback - Advantages of PaybackThe pa...... middle of the paper......fastest return or gives you the highest annual rate of return.RisksA good assessment considers the risks of things going wrong. If a company is fighting a patent infringement lawsuit, ask what would happen if the company lost the case. If your business strategy relies on patents, this may increase the level of risk more than you can accept. Other factors of uncertainty include the inability to secure a government contract, the failure of a land deal, or the possibility that some of the company's key personnel may relocate. If the risks are high, they may outweigh the potential rewards. Conclusion Payback, accounting rate of return (ARR), net present value (NPV) and internal rate of return (IRR) are very important in terms of calculating investment valuation. Each of them performs a different type of feature and is suitable for everyone who is interested in investments.