Investment Appraisal

Investment Appraisal, photo: Gerd Altmann

Course ID: 
Year of Study: 
For Erasmus Students: 

Learning Outcomes

By the end of this course the student will be able to:
  • describe the key steps involved in cost-benefit analysis.
  • understand the theoretical foundations of cost-benefit analysis.
  • identify the benefits and costs associated with a particular project or policy.
  • apply alternative methods for valuing non-market goods and services.
  • identify the problems of risk and uncertainty in the context of project evaluation.
  • understand the choice of an appropriate social discount rate for cost-benefit analysis.
  • apply cost-benefit analysis in the context of public policy.

Course Contents

Introduction. Ex Ante and Ex Post CBA. The basic steps of CBA. The basics of discounting. Net present value and internal rate of return. Mutually exclusive investment projects. Pareto efficiency. Kaldor-Hicks criterion. Social welfare functions. Changes in consumer and producer surplus. Market and government failures. Public goods. Valuing benefits and cost. Shadow prices. Conversion factors. Social discount rate. Risk and uncertainty. Sensitivity analysis. Expected utility. Income distribution. Non-market valuation of goods and services. Case studies-problem solving.

Teaching Activities

Lectures (3 hours per week)

Teaching Organization


Semester workload

Lectures, 3 hours per week

13X3 = 39 hours

Study at home

111  hours

Total number of hours for the Course (25 hours of work-load per ECTS credit)

150 hours (total student work-load)


The overall course grade is the sum of a) the final exam grade plus b) 20 percent of the optional written assignment grade.

The evaluation criteria are clearly defined and posted in the relevant web page of the course:

Use of ICT

Use of IT in teaching, and in communicating with students (e-class).

Course Info

Reading List

Reading Recommendations: 
Αραβώσης, Κ. 2003. Κατάρτιση & Αξιολόγηση Επενδυτικών Σχεδίων & Προγραμμάτων: Από την Θεωρία στην Πράξη. Εκδόσεις Νομική Βιβλιοθήκη, Αθήνα.
Θεοφανίδης, Σ. 1985. Εγχειρίδιο Αξιολόγησης Επενδυτικών Σχεδίων. Εκδόσεις Παπαζήση, Αθήνα.
Μέργος, Γ. 2007. Κοινωνικο-οικονομική Αξιολόγηση Επενδύσεων και Πολιτικών. Εκδόσεις Μπένου, Αθήνα.
Τσακλάγκανος, Α. 1997. Χρηματοδότηση και Αξιολόγηση Επενδύσεων. Εκδόσεις Κυριακίδη, Θεσσαλονίκη.
Bibliography Recommendations: 
Boardman, A.E., D.H. Greenberg, A.R. Vining, and D.L. Weimer. 2011. Cost-Benefit Analysis: Concepts and Practice (4th ed.). Saddle River, N.J.: Pearson Prentice Hall.
Campbell, Harry F. and Richard P.C. Brown. 2015. Cost-Benefit Analysis: Financial and Economic Appraisal using Spreadsheets (2nd ed.). New York: Routledge.
Lumby, S. and Jones, C. 2001. Fundamentals of Investment Appraisal. London: Thomson Learning.