Application of Accounting Methods and Techniques in Appraising Rival Projects in Situations of Risk and Uncertainty

Abstract

In the practical word of business, certainty is a luxury rarely enjoyed by investors. Quite often, investors have to make very important investment decisions in situations of uncertainty and risk. This study looked into the use of accounting methods and techniques. When appraising rival projects in situations of risk and uncertainty. The study tried to ascertain the extent to which individuals and businesses use accounting techniques and methods, when appraising rival projects in situations of risk and uncertainty. In the process of carrying out the study, secondary data were gathered from books and journals, while primary data were obtained through personal interview and questionnaires administered to select business executives, accounting and to accounting staff of the accounting section of various organizations. Simple percentage and chi-square techniques were employed in analyzing the data and testing of hypothesis formulated. The findings included amongst others: 1. In practices most companies do not use accounting methods and techniques to incorporate risk and uncertainty when appraising rival projects 2. Rival projects selected in situations of risk and uncertainty using accounting methods and techniques generally perform better than other projects. Based on these findings, some recommendations were put forward for consideration in chapter five.