Investment appraisal practice in the biggest companies in Poland

Abstract

Purpose: The preliminary research carried out in 2020 in the group of the largest public companies in Poland was to check whether these companies use the NPV method and whether the method of assessing investment proposals is consistent with the indications of the theory. Design/Methodology/Approach: An empirical research was conducted in Poland in 2020 by interviews with management board members responsible for investment decisions, representing the largest public companies in Poland, information was obtained about the organization of the process of evaluating investment proposals. Findings: The survey confirmed the popularity of NPV application in the largest public companies in Poland, as all surveyed entities use this method. It is also no surprise that as many as 93.3% of the surveyed companies use IRR. What is surprising, however, is the frequency of using the payback period commonly criticized in the theory as a project evaluation criterion. This method is used by 80.0% of the largest public companies. Originality/value: This survey is one of the few studies on investment appraisal procedures in the largest Polish public companies.