Lesson Plan

• Describe the main quantitative appraisal techniques (Payback, ARR, NPV, IRR, PI) and their decision rules.
• Calculate NPV and IRR for a sample project and interpret the results.
• Compare the techniques and justify the most appropriate metric for a given investment scenario.
• Apply sensitivity analysis to test the robustness of quantitative outcomes.
• Evaluate quantitative results against strategic objectives and resource constraints.

• Projector and screen
• Whiteboard and markers
• Printed handout summarising each technique and decision rules
• Calculator or spreadsheet software (Excel/Google Sheets)
• Worksheet with sample project cash‑flow data
• Laptop for teacher demo of NPV/IRR calculations

Begin with a brief news clip of a company announcing a major capital investment and ask students what information would convince senior managers to approve it. Connect this to their prior knowledge of cash flows and explain that today they will learn how quantitative results guide those decisions. Success will be measured by students accurately calculating and interpreting key appraisal metrics.

1. Do‑Now (5'): Students list any investment appraisal methods they recall and share one advantage of each.
2. Mini‑lecture (15'): Teacher presents the five quantitative techniques, highlighting formulas, decision rules, and key limitations (use projector and handout).
3. Guided Practice (15'): Whole‑class calculation of NPV and IRR for the sample Project X using Excel; discuss interpretation.
4. Comparative Activity (10'): In pairs, students fill a comparison table (technique, focus, TVM, decision rule, limitation) and justify which metric they would prioritize.
5. Sensitivity Analysis Demo (10'): Teacher shows how altering discount rate and cash‑flow assumptions changes NPV/IRR; students note observations.
6. Check for Understanding (5'): Quick quiz (exit ticket) – one short question on selecting the appropriate technique for a given scenario.

Recap the purpose of quantitative appraisal and the key steps in calculating NPV and IRR. Students complete an exit ticket summarising which technique they would recommend for a high‑risk, low‑liquidity project and why. For homework, they will locate a real‑world investment case, apply one quantitative method, and prepare a brief justification for its acceptance or rejection.