Master in European Regional Development Studies

Project and Investment Appraisal

Course goal

This course aims at contributing to the comprehension of Project and Investment Appraisal fundamental principles and to the way these principles have been applied on planning, programming and management of private and public Projects and Investments. The course focuses on describing and analyzing Project and Investment outlining, Project Objectives and Identification, Mathematical methods in economics and Finance and Project Financial Analysis. Even, it outlines the methodologies of evaluation approaches and project risk assessment and the relationships between investment and regional or urban development are analyzed. Moreover, project analysis by sector is presented and characteristic exercises and case studies are discussed. The course contains a series of exercises regarding the implementation of methodologies presented in the theoretical part. The exercises target at simulating real-world problems and, thus special attention is paid to project size issues. In this way, students can become effectively familiar with reality and get the sense of project or investment appraisal, project programming and planning.

Course subject

• Introduction to project and investment appraisal, description, concise description of basic concepts concerning project and investment objectives, cost and benefit analysis, direct and indirect cost and effects, project and investment life cycle • Analysis of factors that influence investment decision • Analysis of fundamental concepts on financial mathematics (cash flows, rate of return, interest rate, compound interest, time value of money, present value, future value, annuities) •  Investment and project appraisal techniques (net present value NPV, benefit – cost B/C ratio, internal rate of return IRR), project financing, estimation on investment costs, total operating costs and revenues, estimation on loan repayments and loan balance • Strategic analysis of Business Environment • Special Issues in project appraisal, social discounting, economic performance indicators, cost-effectiveness analysis, multi-criteria analysis, economic impact analysis • Direct positive impact of an investment • Project and investment appraisal under uncertainty, sensitivity analysis, probability distributions, expected present value, assessment of acceptable levels of risk, decision tree • Indirect positive impact of an investment • Direct and indirect negative impact • Break even point analysis, linear and non linear model of break even point, sensitivity analysis • Project and investment analysis in the context of urban and regional planning, case studies


Student performance evaluation will be based on one take-home assignment (30% of final grade) and a final exam (70% of final grade).


  • European Commission, Directorate General Regional Policy (2008), Guide to Cost – Benefit Analysis of investment projects, Structural Funds, Cohesion Fund and Instrument for Pre-Accession, Final Report.
  • Polyzos S., (2011), Project Management, Kritiki Publications, Athens (in Greek).
  • Polyzos S., (2011), Exercises on Project and Investment Appraisal, University of Thessaly (in Greek).