In thisarticle we will not consider indicators of well-known calculations of the efficiency of investment ((NPV, irr, etc.), estimates that in most cases are quite complex and require lengthy preparation for the subsequent inclusion in the business plan. The article gives a number of operational methods to carry out a quick assessment of investment. This paper describes a calculation method investments, based on reducing costs. Note that described in this paper, techniques are extremely useful at the initial stages of investment, if necessary, “estimate” the likely economic benefits from the investments held. To begin select the number of investments related not to the implementation of large-scale projects (requiring the preparation of project feasibility study), and with the ongoing activities of the company: renewal of fixed assets, increasing productive capacity, promotion and advertising goods. The question is to calculate the commercial viability of proposed investments in terms of reducing costs.
Criterion for cost reduction is used to evaluate 2 types of investments – update equipment and increasing production capacity. These indicators are used as aids in calculations of investments, creating a business plan or feasibility study. In this case, use the following principle: the investments associated with upgrading equipment (production volume does not change) will be effective when the cost reduction derived from such a change, will provide the necessary compensation. Example The company needs to assess the investment for the future of the business plan or feasibility study for the acquisition of more modern equipment worth 300 thousand rubles. Which will be used within 5 years. Amortization new equipment 60 thousand rubles. per year (ie equipment is fully amortized over five years).
The cost of maintaining equipment 40 thousand rubles. per year. Profit tax of 20%. Tax savings of 12 thousand rubles. per year (60 thousand rubles .* 20%). Current equipment can be sold for 150 thousand rubles., or work out another 3 years, after which will be replaced by a new one. Amortization of existing fixed assets 50 thousand rubles. Per year. Maintenance costs of fixed assets 60 thousand rubles. per year. Tax savings of 10 thousand rub. per year. Savings on costs = (60 + 10) – (40 + 12) = 18 thousand rubles. annual rate of return on savings = cost / (Investments – Income from sale of equipment) = 18 / (300 – 150) = 12%. The evaluation of investments. Conclusion of the acquisition of fixed assets may be taken, in the case where the yield of 12% is sufficient for the company.