Explain and justify given trend and outline its implications

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Reference no: EM13907504

The following is an extract from R.H. Pike (1989) 'Do Sophisticated Capital Budgeting Approaches Improve Investment Decision Making Effectiveness?' The Engineering Economist , 34(2), 149-61

Evaluation of control methods: trend analysis in 100 UK large firms.

Technique	1986	% usage 1981	1985
Payback	92	81	73
Average accounting rate of return	56	49	51
Internal rate of return	75	57	44
Net present value	68	39	32

The above trends suggest an increasing use of sophisticated techniques linked with an increase in payback.

You are required to explain and justify this trend, and outline its implications.

Reference no: EM13907504

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