Formulas and a Computer Program For Tabulation of Selected Investment Factors (original) (raw)

Key Aspects of Investment Analysis

2007

This paper reviewed principally accepted methods applied to investment analysis. To describe every aspect of investment analysis fully would require far more space than available here, so we highlight only of few of its aspects. This study collects several well-known bibliographies, contrasts them with each other and provides explanations for having done so. There are many questions about which authors

Investment Evaluation Difficulties

2011

The financial criteria used for evaluation of the enterprise are not numerous; however, they are causing heated discussion on whether using a criterion at the expense of another. The most utilized financial criteria used in the ranking of investment alternatives are: the net present value criterion, the internal rate of return criterion, the payback period limit criterion and last, but not least, the profitability index criterion. These criteria have in mind, in the first place:  investments impact on enterprise profitableness and results, by recording the future positive cash-flow  investments influence on the balance of an enterprise, traced through the evolution, on one side of the working capital 1 , on the other hand, the size of necessary working capital 2  incidence of the investment project on enterprise risk level 3 Therefore, to ensure the best possible decision making, investors must choose of using, and why not, even construction of relevant indicators regarding the o...

Methods and Approaches to Assessing Investment Attractiveness

Economy of Ukraine

The most important aspect of making any investment decision is assessing the investment attractiveness of the investment object. Investment decisions are one of the most difficult tasks in terms of the selection procedure. They are based on a multivariate, multicriteria assessment of a number of factors and trends that often operate in different directions. The investment attractiveness of the enterprise is used as an integral characteristic of investment opportunities, which is formed by the assessment of the expediency of investing in a particular business entity for a certain period of time. Knowledge of the market value allows the owner of the object to improve the production process, to develop a set of measures aimed at increasing the market value of the enterprise. Periodic valuation improves management efficiency and thus prevents bankruptcy and destruction. Practical methods of assessing the investment attractiveness used by leading Western consulting firms and investment c...

Aggregate Capital Tied-up by Investment Projects-The Possibility of a Simple Estimation

 The aggregate capital needs are a new business economics category which provides a new aspect to evaluate investment projects. The literature does not deal with this category as the project's total financial resource requirement. It is the total capital tied-up for the project in its lifetime. For calculation of it, the yearly capital tie-ups are being added together. Based on this, it can be examined the total capital amount, which results in a given net present value, or the total capital amount, which operates according to the given rate of profitability. The paper interprets the category, presents its relationship with the interest rate, and also presents the method of calculation based on model editing. In the case of the internal rate of return, the estimation may be greatly simplified. Instead of determining the yearly amounts and summation of these, the estimation can be carried out also with a simple division of two data. The paper demonstrates the possibility of simplification and shows an example to present the interrelations of data. Keywords: net present value (NPV), internal rate of return (IRR), capital tied-up, return requirement, yield structure Purpose and Method This paper deals with interpretation and quantification of aggregate capital needs. It is a new business economics category and is useful information for investment project evaluations. The main purposes are as follows:  To introduce the aggregate capital needs as a financial resource tied-up by the project.  To outline the general model of the calculation method alongside the flexible interpretation of the yield structure.  To explain and to prove a possibility of a very simple calculation of this indicator for the case of internal rate of return (IRR). The main research methods are content analysis, methodological analysis, and model construction. Both logical and mathematical processes are used to provide proof. The analyses and the findings are all concerning for investment projects with orthodox cash flow pattern. (These cash flow patterns are named also normal, regular, typical, and conventional). The point is that the series of the difference between annual revenues and annual expenditures start with negative amount or amounts and the sign of these differences changes only once. This narrowing of the scope of the examination is necessary because of the fact that the net present value (NPV) and the IRR method lead to a real result only in