How to evaluate an investment project - Read useful advice

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Applying the method of conditional release. It is appropriate when the project is independent from the company. For this, he is presented as a separate legal entity with its assets and liabilities, costs and revenues. With this technique you can evaluate the effectiveness of the growth and financial viability of the project. But it involves an error in the calculations, which are due to the isolation of the investment plan.
Use the method of analysis of the changes. Make payment only increments that are made in the project activities of the company. The purpose of this approach is to make a comparison of the growth in net revenue with total investment required to increase profits. The advantage of this method - the ease of preparation of the initial data.
Evaluate the project by the method of association. The method consists in constructing a financial plan of the company which is carrying out the investment plan. It includes a forecast of the earnings report, the movement of cash and the balance of the company. In this case, one must know the history of the company to make such predictions for the future.
Use as a layer. First, consider the project, analyze its economic efficiency, financial viability. After prepare a financial plan for the organization, but without taking into account the investment plan. Then align the results of this project and the activities of the enterprise. The results will tell you about the financial viability of the company, taking into account the investment project.
Make Finally, assessment of the investment project by comparison. The essence of the method is to describe the first budget plan of the enterprise, which carries out the project. Then describe current production (excluding the project). On the basis of this assessment of the financial viability swipe firms carrying out investment plan. Compare net income with the project without him. The difference is just give an accurate assessment of the investment project.
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