Survey of Project Evaluation Techniques Currently Used in Industry
Companies use various project evaluation techniques to determine the feasibility and profitability of a project. We surveyed some of the largest “Fortune 500” Industrial and Service corporations in December 1991 about their use of these techniques. The survey was compared to a similar 1978 study by the American Association of Cost Engineers (AACE). Thirty-three (33) companies replied to the 1991 survey. These replies show a change in the use of corporate project evaluation techniques since 1978. There has been a shift from the use of Internal Rate of Return (IRR) to Net Present Value (NPV) and a decrease in the use of the Payback Period (PBP). The 1991 survey showed 97% of the surveyed companies use NPV, as opposed to only 52% in the 1978 AACE survey. The percentage of surveyed companies using IRR dropped from 100% in 1978 to 90% in 1991. Also, the percentage of surveyed companies using PBP dropped from 78% in 1978 to 64% in 1991.
Copyright © 1993 Published by Elsevier Science B.V. All rights reserved.
Remer, Donald S., Scott B. Stokdyk, and Mike Van Driel. "Survey of Project Evaluation Techniques Currently Used in Industry," in the International Journal of Production Economics, Vol. 32, No. 1 (August 1993), 103-115. doi:10.1016/0925-5273(93)90013-B