Decision techniques for modernization of investments and an application for a company

In today?s business, the companies make investments not only for expansion but also formaintaining their continuity. The selection of the process and the machinery related to this purposeis the main difficulty that the companies face in their investment decisions. In this thesis, thediversity of the textile machinery, their influence on production and the general costs makethis selection even more complex.Modernization of investment has become unavoidable due to the technologicaldevelopments. While deciding the modernization investments, some decision techniques are usedfor choosing the best alternative investment by investor or manager. The most useful techniques formodernization of invenstments are Annual Equivalent Expense Method, Net Present Value Methodand Internal Rate of Return Method.In this thesis, a modernization investment that realized at a clothing industry company isobserved and at the end of this observation with the methods in concern, it is determined that thepresent machines are not sufficient, therefore it is suggested that the investor should buy newmachine for the new production.Keywords: Annual Equivalent Expense, decision techniques, Internal Rate of Return,Modernization, Net Present Value.