The Applicability of Project Evaluation Techniques in Small and Medium Scale Manufacturing Firms in Nigeria

Abstract

This study analyzed the applicability of project evaluation techniques in small and medium scale (SMS) manufacturing firms in Nigeria. Vis-a-vis specified factors. The researcher analyzed the probability of discounting project evaluation techniques being used in these firms. The research population comprised chief executives of SMS manufacturing firms registered with the National Association of Small and Medium Scale Enterprises (NASME), Enugu State Chapter. A convenience sample, comprising 100 chief executives of small scale manufacturing firm s and 100 chief executives of medium scale manufacturing firm s, was obtained from the research population. The research instrument was a structured questionnaire containing close-ended questions. Data used in the study were all obtained through the research instrument. All the data were manually computed and then calibrated into the SPSS regression module ' for extensive statistical analysis. The relationships outlined by the data set were statistically analyzed using simple percentages, a logistic regress ion model, and the two-t ailed Z-test for the equality of two proportions. The empirical results indicated that most SMS manufacturing firms do not use discounting project evaluation techniques. Those firms that do tend to embrace the techniques more when it comes to evaluating existing projects. The result s also clearly established that exchange rate volatility, inflation rate volatility, forecasting accuracy, monetary policy, fiscal policy, and political stability do not significantly influence the decision to apply discounting project evaluation techniques in SMS manufacturing firm s in Nigeria. Thus, the likely factor that could plausibly be responsible for the problem is firm entrepreneurs' and managers' ignorance of the need to systematically and technically evaluate future and existing project trends today.