Net Present Value Approach: Method for Economic Assessment of Innovation Projects

Abstract

This paper is dedicated to the issue of innovative performance measurement. It focuses on techniques that can be employed for evaluation of single innovation project. The framework is based on detailed literature review and net present value (NPV) approach analysis. Furthermore, the paper investigates its pros and cons and discusses methods able to deal with NPV weaknesses. Used with care, these techniques can guide the management of innovation project by providing indications of its potential financial value.This paper is dedicated to the issue of innovative performance measurement. It focuses on techniques that can be employed for evaluation of single innovation project. The framework is based on detailed literature review and net present value (NPV) approach analysis. Furthermore, the paper investigates its pros and cons and discusses methods able to deal with NPV weaknesses. Used with care, these techniques can guide the management of innovation project by providing indications of its potential financial value.