The Role of Financial Appraisal in Decisions to Acquire Advanced Manufacturing Technology

There have been suggestions that the financial appraisal techniques which are commonly applied to capital expenditure proposals may be unsuitable for evaluating proposals concerned with the acquisition of advanced manufacturing technology. This paper reviews the arguments advanced to justify exempting such proposals from financial appraisal. It is argued that the case against financial appraisal is not substantiated. The difficulties cited by the critics of financial appraisal can be resolved by better management of the appraisal process.