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en:what-is-an-investment-project [2018/09/10 15:09]
federico [Classification of Investment Projects]
en:what-is-an-investment-project [2018/09/10 15:28]
federico
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 ====== ¿What is an Investment Project? ====== ====== ¿What is an Investment Project? ======
  
-An investment project is the planning ​of a long term allocation of funds with the objective of generating future profits. ​+An investment project is a proposal ​of a long term allocation of funds with the objective of generating future profits. ​
  
 **Time frame**: An investment project differs from the execution of the investment. The project is made before the execution. ​ **Time frame**: An investment project differs from the execution of the investment. The project is made before the execution. ​
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 ==== Evaluation of Investment Projects ===== ==== Evaluation of Investment Projects =====
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 +{{:​en:​investment-project.jpg?​nolink|}}
  
 An important part of any investment is the evaluation of its profitability. During the evaluation of the investment project, several measures for capital budget decisions will be made, including: ​ An important part of any investment is the evaluation of its profitability. During the evaluation of the investment project, several measures for capital budget decisions will be made, including: ​
  
-* Internal Return Rate +  ​* Internal Return Rate 
-* Net Present Value  +  * Net Present Value  
-* ROI+  * ROI
  
 Because this is done before the actual execution of the project, only the best performing projects (according to the estimates) will be carried on. The objective is to maximize profits (for private investments) or to maximize public well-being (for public investments). Because this is done before the actual execution of the project, only the best performing projects (according to the estimates) will be carried on. The objective is to maximize profits (for private investments) or to maximize public well-being (for public investments).
  
 The evaluation of investment projects requires to estimate future profits and expenditures. High risk investment projects are more difficult to evaluate, because there is a high volatility on variables that will define the expected return, like the price or the quantity of sales. The evaluation of investment projects requires to estimate future profits and expenditures. High risk investment projects are more difficult to evaluate, because there is a high volatility on variables that will define the expected return, like the price or the quantity of sales.
en/what-is-an-investment-project.txt · Last modified: 2018/09/10 15:28 by federico