When investing in new projects, both the monetary and
non-monetary aspects should be considered. Investing in new projects is
generally done to gain a profit in order for a business to expand and grow.
Although monetary benefits are easily interpreted and cost effective, not all
projects can be based solely on the monetary costs and benefits.
Non-monetary aspects of an investment includes corporate
social responsibility, it is vital that modern day businesses take into account
corporate social responsibility as consumers are prioritizing CSR and holding
businesses accountable for their environmental, legal, political and social
actions. Corporate social responsibility could be considered one of the main
non-monetary benefits; this is due to the fact that it allows corporations to
build trust with customers, which will allow corporations to attract new
customers while retaining their existing consumers.
In January 2009, the Department for Communities and Local
Government published a Multi-Criteria Analysis, which provided a detailed
explanation of MCA theory and practice. The aim of this was to provide an
appropriate method to assess non-monetary factors in order to present them with
When investing in a project both the monetary and
non-monetary aspects are relevant. In order for a company to invest in a
project, they have to decide whether future return is likely to be achieved;
therefore numerical analysis is critical when investing, as it will allow the
directors make a decision based on the returns estimated. Numerical analysis
also allows companies acknowledge many different variables such as calculating
the risk and uncertainty involved in a certain project; this allows companies
to measure whether the paybacks exceed the initial cost of investment.