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Investment analysis in the process of project selection is of the key factors which
guarantee the successfulness of the project especially in the real estate and
construction industry. The study aimed at exploring how National Housing
Corporation (NHC) does investment analysis in selection of projects with the specific
objectives of identifying techniques and criteria used by NHC in selecting projects,
assessing the way NHC does investment analysis for its projects as well as
ascertaining decision criteria used by NHC in selection of its investments. NHC was
used as the case study of the research and the researcher employed the mixed research
approach involving the use of both qualitative and quantitative research approaches.
Questionnaires, Interview and documentary review were used as the data collection
tools and information were obtained from both the primary and secondary sources.
The study used the purposive sampling techniques to obtain the sample size of 15
respondents who were having the accurate information demanded as well as the
experience of working on the projects selections of NHC from Directorate of
Treasury and Business Development (DTBD). The findings of this study revealed
that NHC used investment analysis in selection of projects and methods used in
investment analysis were internal rate of return (IRR), payback period (PBP) and net
present value (NPV). NHC acceptance criteria was project which gives IRR ≥desired
discount rate, projects which gives NPV ≥0 and also project whose PBP is ≤10years.
The study also found out that other decision criteria used by NHC in selection of
projects were Political influence, government directives, NHC investment policy,
geographical distribution and diversification mix, economic factor, financial factor,
technical factor, market factor and social aspects. Also, through review of some
feasibility studies, it was found that there was poor analysis on technical, financial,
market aspects and poor research on customer preferences. The study recommended
that NHC should revise on how it carries out technical analysis, market analysis, and
financial analysis and do more research on customer requirements towards NHC
projects. . |
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