Comparative analysis of efficiency criteria for investment projects
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- Category: Content №5 2022
- Last Updated on 30 October 2022
- Published on 30 November -0001
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Authors:
O.Yankovyi, orcid.org/0000-0003-2413-855X, Odesa National Economic University, Odesa, Ukraine, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Yu.Yegupov, orcid.org/0000-0002-1908-3809, Odesa National Economic University, Odesa, Ukraine, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
H.Koshelok, orcid.org/0000-0003-0331-0592, Odesa National Economic University, Odesa, Ukraine, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
V.Yankovyi, orcid.org/0000-0001-7005-5291, Odesa National Economic University, Odesa, Ukraine, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
O.Chernyshova, orcid.org/0000-0002-5781-8044, Odesa College of Trade and Economics of Kyiv National University of Trade and Economics, Odesa, Ukraine, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Naukovyi Visnyk Natsionalnoho Hirnychoho Universytetu. 2022, (5): 164 - 169
https://doi.org/10.33271/nvngu/2022-5/164
Abstract:
Purpose. Analysis of the advantages and disadvantages of indicators of the internal rate of return and the modified internal rate of return as criteria for the effectiveness of an investment project.
Methodology. The mathematical and graphic apparatus for studying the functions and dependencies between the economic characteristics of future financial and production activities of entrepreneurial activity was used in the process of the analysis of the most important indicators of the effectiveness of the investment project.
Findings. The characteristics of the criterion of the internal rate of return are studied on the basis of the properties of the function which describes the dependence of the net present value of the project on the value of the discount rate. The main advantages of the modified internal rate of return in comparison with its unmodified analogue are revealed. The inequalities between the indicated indicators are mathematically proved, their influence on the stability (safety) characteristics of the investment project is analyzed, and the interrelation of the criterion of the modified internal rate of return with the value of the profitability index is shown.
Originality. The originality consists in the mathematical proof of the interrelation between the indicators of the internal rate of return and the modified internal rate of return, as well as the interrelation between the criterion of the modified internal rate of return and the profitability index of the investment project.
Practical value. Theoretical conclusions and suggestions can be used in the investment analysis of future financial and production projects in the domestic economy, which opens up the possibilities of rational use of resources in entrepreneurial activity at all levels of business process management.
Keywords: investment project, internal rate of return, profitability index, net present value
References.
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2. The Global Risks Report (2021). Retrieved from https://www3.weforum.org/docs/WEF_The_GlobalRisks_Report_2021.pdf .
3. Arjunan, K. (2017). Modified IRR (MIRR) is a Spurious criterion and should not be used in cost-benefit analysis and investment analysis. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2942456.
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9. Yankovyi, V., Koval, V., Dudka, T., & Bykhovchenko, V. (2021). Statistical assessment of project economic priority in companys investment management. Revista gestin de las personas y tecnologa, (42), 98-119. https://doi.org/10.35588/gpt.v14i42.5284.
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