engleski

Impact Of Discount Rate On The Decision-Making Process Of Investments Projects

A prerequisite of successful operation of firm, in today's turbulent and uncertain market, is conditional on the previously adopted the financial plan of capital investments by the company management. To make quality decisions on capital investment it is necessary to carry out detailed financial planning of capital investment by using the methods and criteria for evaluating the financial efficiency of investment, all in order to reduce risk. It must be emphasized that a detailed and sophisticated financial planning of capital projects is associated with projects that will significantly burden the future financial business. Valuation and selection of optimal investment project is directly related to the choice of discount rates. Uncertain and turbulent environment affects the selection of rate discounts, that directly conditions and profitability of the investment project. This paper presents of basic, additional and specific method of evaluation of capital projects, and the impact of discount rates on choice of the optimal investment of the project.

capital projects; financial planning; discount rate; investment project; risk.

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