Methodical approaches to the assessment of investment attractiveness of agricultural enterprises


Keywords: estimation of investment efficiency, indicators, agricultural enterprises, methods of evaluation.

Abstract

Evaluation of investment efficiency is central to the process of justifying and selecting possible options for investing in investment projects, and is therefore a key to successful implementation of investment activities of agricultural enterprises. The main directions of financing of investment projects of agricultural enterprises are: purchase or construction of unfinished construction objects, new construction, expansion of existing enterprises, reconstruction of existing enterprises and technical re-equipment of existing enterprises. Two main groups of methods of assessing the cost-effectiveness of investment projects have become most widespread: static and dynamic. Static methods involve the calculation of indicators based on undiscounted cash flows. Dynamic methods, on the contrary, take into account the change in the value of money over time and imply bringing the values of all cash flows to the same period by discounting or compounding. Dynamic methods for assessing the effectiveness of investment projects include the following basic methods that rely on most modern Ukrainian enterprises, such as net present value cash flow (NPV), internal rate of return (IRR), payback period (DPP) and project profitability index (PI). On their basis the basic methods of selection of investment projects of agricultural enterprises are formed. Net Present Value (NPV) calculation. is based on comparing what will be invested in the future with what is invested now. The Profitabale Index (PI) is directly related to net present value and is defined as the ratio of the discounted cash flow to initial investment. The IRR (Internal Rate of Return) is the discount rate at which the projected cash inflows are equal to the project's discounted cash flows. As indicators of the effect in calculating the overall efficiency of investments, it is advisable to use changes in the following values of growth: revenue from the sale of enterprise products; gross income; profit before tax; net profit; cash flow; clean products. Gross and net investment should be included in the costs. The use of qualitative methods in investment analysis is due to the following reasons: the subjectivity of the phenomena or characteristics studied; lack or lack of necessary information; inability to analyze objective and acceptable methods; lack of research object (to be created during project implementation). Quantitative methods for evaluating agricultural investment projects include methods of probability theory and mathematical statistics, as well as economic and statistical methods.

References

Kangro, M.V. (2011). Metody ocenki investicionnyh proektov: uchebnoe posobie. Ul'ja-novsk: UlGTU (in Russian).

Stasiuk, N.R., & Hreskiv, I.R. (2015). Metody otsiniuvan-nia efektyvnosti investytsiinykh proektiv: perevahy ta nedoliky. Mykolaivskyi natsionalnyi universytet imeni V.O. Sukhomlynskoho, 6, 306–309. http://global-national.in.ua/archive/6-2015/62.pdf (in Ukrainian).

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Published
2019-11-16
How to Cite
Myniv, R. (2019). Methodical approaches to the assessment of investment attractiveness of agricultural enterprises. Scientific Messenger of LNU of Veterinary Medicine and Biotechnologies. Series Economical Sciences, 21(93), 63-69. https://doi.org/10.32718/nvlvet-e9313