This Chapter discusses different financial criteria. It again restated the concept of [[Present Value (PV)]] illustrated with the following example: ||Market Value||h |Asset|Reject Project X|Accept Project X|h |Cash|1|0| |Other Assets|9|9| |Project X|0|PV| |Total|10|9+PV| The point here is that if the [[Present Value]] is bigger than the investment, a project is worthwhile doing and directly contributing in a bigger way to the value of a firm. Other financial metrics are: * [[Book rate of return]] ** Drawback is that this metric takes the average profitability of all past decisions into the equation. * [[Pay back period]] * [[IRR]] If you need to choose a project in the light of limited resources (=always!) than the metric of [[Profitability Index]] may be useful.