Concept of the investment project

Course work

Topic: “Commercial, budgetary and economic efficiency of investment projects.”

Done by: Alausaeva A.K.

Finance 231

Checked by: Baizhigitov E.B.

Almaty 2013

Content.

INTRODUCTION ………………………………………………………………

Chapter 1. Investment project and their classification …….…………………

1.1. Concept of the investment project

1.2. Characteristics of the investment project and its life cycle

1.3. Characteristic performance indicators of the investment project

1.3.1 Definition and types of investment projects

1.3.2 Objectives and principles for evaluating the effectiveness of the investment project

Chapter 2. Efficiency of investment projects ………………………………

2.1Commercial effectiveness……………………………………………….

2.2 Budgetary efficiency…………………………………………………….

2.3 The economic efficiency ……………………………………………….

2.4 ………………………………………………………………………

CONCLUSION …………………………………………………………………

THE LIST OF THE USED LITERATURE ………………………………….

Introduction

Today in the banking sector of economy there was a situation when banks possess a large number of free resources and can't find spheres for their placement. The market of the short-term credits is oversaturated. Many enterprises gradually leave crisis and already independently can provide itself with necessary current assets. In this situation banks are faced by a problem of development of other directions of an investment of the attracted resources. The investment of the raised funds in the long-term credits and joint participation in investment projects is capable not only to make profit for banks, but also as a whole to promote improvement of an economic situation in the country. In this regard at banks to appear the new problem – an assessment of efficiency of investment projects. Right assessment of the investment project, has to help banks with a choice of projects in which banks will put the resources.

It is possible to distinguish the following from problems of the real work:

First, to define the principles and problems of an assessment of investment projects.

Secondly, to consider methods which are applied in the field.

And, at last, the third problem of this work is studying of the problems arising in modern conditions at carrying out an assessment of the investment project and minimization of their negative influence.

I CHAPTER. INVESTMENT PROJECTS AND THEIR CLASSIFICATION

Concept of the investment project

The term "investment" is included into number of most often used concepts of the economy in process of transformation or feeling enthusiasm.

This concept occurs from Latin " investio” – I dress, and implies long-term capital investments in economy within the country and abroad. In managements on investing activities it, as a rule, treat in a broad sense, understanding as an “investment "an expenditure of resources in hope of receipt of the income in the future, after rather long period of time".

Traditionally differentiate two types of investments – financial and real. The first represent capital investments in non-current financial assets – shares, shares, bonds; the second – in development of material base of the entities of production and non-productive spheres. The special term is assigned to real investments in the Kazakhstan legislation – capital investments which is understood as investments into fixed capital (property, plant and equipment), including costs for new construction, expansion, reconstruction and modernization of operating plants, acquisition of machines, the equipment, the tool, stock, design and exploration work and other costs.

Forms of investing activities can be also classified as follows:

• On investment terms: short-term (till one year); medium-term (till 3 years); long-term investments (over 3 years).

• On patterns of ownership: private (non-state); state investments; the foreign and joint (mixed) investments.

• On a regional sign: internal (national investments and investments abroad (foreign investments).

• On an industry sign: investments into the industry; rural hoz-in; construction; transport and ligature; trade and public catering and so forth.

• On risks: aggressive investments (a high risk, possess high profitability and low liquidity); moderate investments (an average risk degree in case of sufficient profitability and liquidity of investments); conservative (the lowered risk degree, reliability and liquidity).

Investments play a very important role in economy. They are objectively necessary for stable development of economy, ensuring sustained economic growth. Active investment process predetermines the economic capacity of the country as a whole, promotes increase of a standard of living of the population. Economic activity of separate accounting entities depends substantially on amounts and forms of performed investments.

Subjects of investing activities are investors, customers, contractors, users of objects of capital investments and other persons. The physical persons and legal entities created on the basis of the agreement on joint activities can be investors, i.e. the persons performing capital investments.

According to the investment project investors, and the physical persons and legal entities authorized by them can act as customers as actually.

In most general sense as the investment project understand any capital investments for term for the purpose of commercialization. In special economic literature on investment designing and the project analysis the investment project is considered as a complex of the interconnected actions directed on achievement of particular purposes during the limited period of time.

Quite often the project is understood as set of documentation describing an order of creation and the requirement to any construction. Other understanding of this term is reduced to that the project — is the plan of any action which is important for his initiators and organizers. Some authors determine the project as the system of the actions directed on achievement of accurately formulated purpose with use of a certain set of resources.

From the point of view of the concept of Project Management (project management) the project — change of an initial condition of system (for example, the entities), connected with costs of time and means. Domestic economists determine the project as system of the purposes formulated in its framework created or modernized for their implementation of physical objects, engineering procedures, technical and organizational documentation for them, material, financial, labor and other resources, and also management decisions and actions for their accomplishment.

Thus, the project includes three basic elements: plan, implementers, implementation purposes.

Difference of the project from a production system is that the project is single, acyclic activities. Serial production has no in advance determined end in time and depends only on availability and demand size. When demand disappears, production cycle comes to an end. Production cycles in pure form aren't projects.

Any project is characterized by four major factors (classification signs):

· orientation on achievement of specific purposes, certain results;

· scale (size) of the project;

· limited extent in time, with a certain beginning and the termination

(implementation terms);

· limitation of resources.

In the normal project all this factors are considered as more or less equal. However in the majority projects the dominating role is played by one (or a

little) from the listed factors.

In particular, the investment project is characterized by the considerable it is (more than a year) terms of implementation and limitation of investment resources.

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