The importance of investment appraisal
The investment appraisal and business case for the project or programme depends on attribution of benefits at the right level. The business case brings together the investment appraisal for the project, programme or portfolio, with a wider evidence-based narrative of how the investment is intended to lead to realisation of the intended qualitative and quantitative benefits.
It is normal to compare options using an investment appraisal that considers the trade-off between whole-life costs, benefits and deployment risks to determine the best value for money option.
The time taken to deliver projects can vary enormously, from weeks to many years. In addition, the time taken to realise the benefit from a project can again vary enormously. If the project is to take place over multiple years, the time value of money needs to be considered.