Investment appraisal techniques and constraints on capital investment

The objective of this study is to determine the level of application and perception of finance executives and analysts regarding the investment appraisal techniques in Pakistani corporate sector in the light of theory. This study also investigates the major constraints on capital investment. Total 63 questionnaires were distributed in different cities of Pakistan (Islamabad, Rawalpindi, Lahore, Multan and Faisalabad) but only 37 properly filled questionnaires were processed; the potential respondents were the finance executives and Chief Financial Officers (CFOs) of the companies. The companies listed at KSE related to ten leading sectors were the population of this study. It is concluded that corporate managers are having the awareness about the worth of investment appraisal techniques and consider these techniques as important for long term profitability and survival of the company. It is also concluded from results that the availability of finance, lack of profitable investment opportunities and the attitude of senior management are the major constraints on capital investment.