VARIATION OF THE ACTUALIZATION RATE AND ITS IMPACT ON THE ECONOMIC EFFICIENCY OF INVESTMENT PROJECTS
Journal Title: MANAGERIAL CHALLENGES OF THE CONTEMPORARY SOCIETY - Year 2016, Vol 9, Issue 1
Abstract
Investment projects with capital formation are crucial for economic growth. They have to be closely assessed in the view of economic and financial efficiency they provide. The study focuses on CBA methodology, applicable in this cases. It also emphasizes on the essential differences among the two main approaches in case of investments projects valuation. Dynamic approach, which is much complex and comprehensive, is essentially based on the actualization technique and the actualization or discount rate as a prime parameter. The practical part of the paper highlights the influences the variation of discount rate has on the values of the most relevant efficiency indicators. Results are discussed and analyzed so as to be able to draw important conclusions regarding how the management of the investment project is affected and what proper measures might be taken into consideration.
Authors and Affiliations
CĂTĂLIN AFRĂSINEI-ZEVOIANU
Keywords
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VARIATION OF THE ACTUALIZATION RATE AND ITS IMPACT ON THE ECONOMIC EFFICIENCY OF INVESTMENT PROJECTS
Investment projects with capital formation are crucial for economic growth. They have to be closely assessed in the view of economic and financial efficiency they provide. The study focuses on CBA methodology, applicable...