TABLE OF CONTENTS 
With hindsight it is not difficult to analyse the factors that have made some investment projects in the recreation, leisure and tourism sector such successes and others such dismal failures. The failures include projects (The Millennium Dome, London), transport systems (United Airlines) and electronic games (Sega Saturn). The successes include projects as diverse as films ( Lord of the Rings), visitor attractions (Port Aventura, Spain), and electronic games (Sony PlayStation).
However, at the planning stage, it is much more difficult to forecast the success of investments, largely because of the uncertainty surrounding the future. This chapter seeks to define the meaning of investment, consider how potential investment projects are appraised and stress the shortcomings of quantitative techniques.
By studying this chapter students will be able to:
define and distinguish between different types of investment;
analyse the factors which affect an investment decision;
utilize techniques for investment appraisal;
understand the uncertainty surrounding investment appraisal;
analyse the effects of investment on the economy;
evaluate government policy with regard to investment.
In general usage people use the term investment to include bank and building society deposits and the purchase of stocks and shares. Economists are more specific in their use of the term. Investment may be defined as expenditure on capital goods and working capital. Capital goods can be contrasted with consumer goods. The latter are produced because of...
