Investment appraisal INVA
Assessing the attractiveness of possible investments or projects.
Updates for SFIA 9
- There is an updated version of this skill for SFIA 9.
- You can move to SFIA 9 when you are ready - SFIA 8 skill descriptions will still be available to use.
- Previous SFIA assessments or skills mapping are not impacted by this change.
Guidance notes
Activities may include — but are not limited to:
- selecting and using appropriate techniques to compare financial investments and returns
- using recognised investment appraisal techniques to compare investment and returns include payback period, accounting rate of return, discounted cash flow (net present value and internal rate of return)
- collecting data using appropriate top-down or bottom-up approaches
- including other factors into the appraisal approach — such as legal considerations, environmental or social impact, operational benefits, risk
- developing scoring methods to allow for subjective benefits or dis-benefits and to aggregate the results of multiple appraisal methods to help compare options
- documenting and presenting the results of investment appraisals
- establishing investment appraisal as a tool for selecting projects/initiatives for further investigation.
- identifying possible sources of funding and the impact on the investment appraisal.
Levels of responsibility for this skill
| 4 | 5 | 6 |
Investment appraisal: Levels 1-3
This skill is not typically observed or practiced at these levels of responsibility and accountability.
Investment appraisal: Level 4
Develops and documents investment appraisals for a range of different projects.
Identifies suitable appraisal techniques based on the characteristics of a project.
Collects the information required to create an investment appraisal in collaboration with internal and external stakeholders. Presents findings of investment appraisals to selected stakeholders.
Refines and maintains investment appraisals.
Investment appraisal: Level 5
Advises on investment appraisal approaches and tailors organisational standards to the context of portfolios/programmes.
Leads investment appraisal activities for simple portfolios and programmes and complex projects.
Investment appraisal: Level 6
Develops organisational policies, standards, and guidelines for investment appraisals.
Leads activities to establish consistent appraisal across the component projects and programmes within a portfolio.
Reviews investment appraisals for high-value initiatives to assure their quality.
Leads investment appraisal activities for complex programmes of work and portfolios.
Investment appraisal: Level 7
This skill is not typically observed or practiced at this level of responsibility and accountability.