scholarly journals USING METHODS FOR ASSESSING ECONOMIC RISKS TO MAKE INVESTMENT DECISIONS

2021 ◽  
Author(s):  
Olena Shevchenko ◽  
Svitlana Shcherbinina
Keyword(s):  
Investment Project ◽  
Managerial Decision ◽  
Data Set ◽  
Neoclassical Theory ◽  
Investment Projects ◽  
Risky Investment ◽  
Risk Criterion ◽  
Value Range ◽  
Variable Dispersion ◽  
Economic Risks

The article uses methods of quantitative evaluation of economic risks that allow in conditions of uncertainty to provide an industrial enterprise with information on a less risky investment project for the adoption of a managerial decision. Several methods for assessing the risk of investing are used: the size of the dispersion, the value of the coefficient variation, the size of the semivariation, the size of the coefficient of semivariation, the value of the coefficient of asymmetry. Dispersion is a statistical term that describes the value range values expected for a particular variable. Dispersion is used in studying the variability of profits from a specific trading strategy or investment portfolio. This is often interpreted as a degree of uncertainty and, therefore, the risk associated with a certain portfolio of securities or investments. Semiivariation is an indicator of data that can be used to assess potential investment risks. Semivarianity is calculated by measuring the dispersion of all observations that fall below the middle or target data set. Neoclassical theory goes out for understanding that risks are just unfavorable scenarios for an investor company. Therefore, it is necessary to take into account the unfavorable deviations. When the management subject is loyal to risk, then it is necessary to use the coefficient of semivariation, which can also be determined which of the projects. If the company wants to successfully investigate the project, it is important to identify situations where the probability and magnitude of a positive (or negative) result is much larger than the opposite result. Understanding asymmetric risk is crucial for making correct decisions. The ability to identify asymmetric risk helps to avoid potentially dangerous situations where there are not enough errors. It also allows you to use the opportunities for investments where there are several ways to win. The criterion of maximum asymmetry is the minimum risk criterion. The results of the quantitative assessment of economic risks enable to substantiate the economic efficiency of investment projects.

Improving the financial investment system as an object of business economics

2020 ◽  
Vol 26 (3) ◽  
pp. 508-526
Author(s):  
O.T. Astanakulov ◽  
E.G. Sheina
Keyword(s):  
Deductive Reasoning ◽  
Methodological Approach ◽  
Investment Project ◽  
Assessment Method ◽  
Expert Assessment ◽  
Business Economics ◽  
Financial Investment ◽  
Economic Relations ◽  
Investment Projects ◽  
Investment Control

Subject. This article explores the economic relations of economic entities concerning effective investment activities, combining elements of investment control and assessment of related risk. Objectives. The article aims to analyze and logically substantiate the stages and types of investment activities of enterprises and investment projects in-progress, as well as define a methodological approach to assessing project risks. Methods. For the study, we used a structural and logical analysis, and deductive reasoning. The methodological base of the study is based on the principles of the theory of finance, investment and risk management. Results. The article defines stages of assessing the financial condition of enterprises and proposes a methodological approach to assessing certain risks of an investment project based on the risk ranking by degree of probability and significance of an event through applying the expert assessment method. The article also presents a practice-oriented risk map for investment projects and clarifies the concept of Investment Control. Conclusions. The results of the study can help address the significant for the Russian economy issue of stimulating and developing investment activities at enterprises, as well as implementing and evaluating the effectiveness of investment projects at the micro-and macro-levels of the country's economy.

نماذج المحاكاة- محاكاة مونتي كارلو- كأسلوب كمي من أساليب النمذجة واتخاذ القرارات - مقاربة نظرية وتطبيقية

2021 ◽  
Vol 1 (1) ◽  
Author(s):  
محمد الأمين ◽  
بن حامد عبد الغني ◽  
مراس محمد
Keyword(s):  
Monte Carlo Simulation ◽  
Monte Carlo ◽  
Quantitative Methods ◽  
Practical Importance ◽  
Investment Project ◽  
Simulation Method ◽  
Period Analysis ◽  
Investment Projects ◽  
Monte Carlo Simulation Model

Our research aims to try to present the modeling mechanisms in the field of simulation and quantitative methods. The research is a presentation of the role of quantitative methods in making investment project evaluation decisions, more than that and is the use of the Monte Carlo simulation model in evaluation and multi-period analysis of investment projects under conditions Risk and uncertainty. And highlighting the theoretical, scientific and practical importance of the Monte Carlo simulation method in particular, and the importance of using quantitative methods in helping to make decisions in general

Recommendations for risk management of the company’s investment project

2021 ◽  
pp. 44-54
Author(s):  
T.V. Orel ◽  
I. V. Korneeva
Keyword(s):  
Risk Management ◽  
Investment Project ◽  
Investment Projects

Planning investment projects involves the need to study the risks that affect the profitability of projects. Otherwise, such investment projects can lead to significant losses. Therefore, timely identification and management of all risks of an investment project is of particular importance.

INTERREGIONAL COOPERATION IN THE FIELD OF SOCIO-ECONOMIC DEVELOPMENT (ON THE EXAMPLE OF THE PARTICIPANTS OF THE COMPLEX INVESTMENT PROJECT “YENISEI SIBERIA”)

2020 ◽  
Vol 6 (12) ◽  
pp. 136-140
Author(s):  
V. T. LYKTAN ◽  
◽  
S. P. MONGUSH ◽  
Keyword(s):  
Economic Development ◽  
Statistical Analysis ◽  
Investment Project ◽  
Investment Projects ◽  
Effective Implementation ◽  
Multiplicative Effect ◽  
Socio Economic Development ◽  
Interregional Cooperation

The aim of the work is to study the aspects of interregional cooperation in the formation of the complex investment project “Yenisei Siberia”. Methods of statistical analysis were used – dynamics, comparison, grouping. The article provides an overview of the main socio-economic differences between the participants of interactions. Minimizing these differences will create conditions for the effective implementation of investment projects that provide a multiplicative effect in the development of the project territories.

The development of the pension system of Russia: Challenges and opportunities

2021 ◽  
Vol 27 (11) ◽  
pp. 2548-2574
Author(s):  
Andrei I. MASTEROV
Keyword(s):  
Russian Federation ◽  
Pension System ◽  
Investment Project ◽  
Investment Climate ◽  
Demographic Trends ◽  
Investment Projects ◽  
Challenges And Opportunities ◽  
The Russian Federation ◽  
Low Efficiency ◽  
The Impact

Subject. This article analyzes the economic and demographic conditions for the Russian pension system’s development and the impact of the effectiveness of investment projects implementation on pension savings. Objectives. The article aims to analyze the Russian pension system’s development difficulties in terms of an unfavorable investment climate and negative demographic trends, and identify ways to propel the pension savings investing profitability increase. Methods. For the study, I used induction and deduction, and the methods of systems and statistical analyses. Results. The article offers recommendations for the development of a system of measures aimed at improving the methodological support for the preparation and implementation of management decisions on investment project management. Conclusions and Relevance. Solving the problems of the pension system through the development of voluntary pension savings is constrained by the low efficiency of the investment projects implementation. The results of the study can be used when developing legislative, organizational and methodological measures aimed at improving the efficiency of investing pension savings in investment projects implemented in the Russian Federation.

Capital Budgeting and business cycles

2021 ◽  
pp. 315-335
Author(s):  
Edward W. Fuller
Keyword(s):  
Interest Rate ◽  
Demand Curve ◽  
Supply And Demand ◽  
Investment Project ◽  
The Other ◽  
Investment Projects ◽  
Scarce Resources ◽  
Other Hand ◽  
The Future ◽  
The Interest Rate

Every investment project is aimed at achieving some future goal. This goal can only be attained by employing scarce resources, like time. Every investment project entails foregoing other investment projects. It is impossible to undertake all investment projects simultaneously because resources are scarce. This means each investment project is subject to cost. The investment project may be unsuccessful in achieving the future goal and the entrepreneur may suffer a loss. On the other hand, investment projects are only undertaken because they are perceived as more valuable than their costs. Every investment project undertaken implies the possibility of earning a profit. Investment projects take time. An investment project can be represented by a time line. Time A represents the beginning of the production process. Time B is the end of the production pro-cess. Line AB is called the period of production. Present goods are scarce resources that can be consumed im-mediately. On the other hand, future goods cannot be consumed immediately. Future goods are only expected to be consumer goods at some point in the future. An investment project entails making an investment at time A and receiving a present good at time B. All else equal, present goods are more valuable than future goods.1 Any good at time A is more valuable than the same good at time B. This is called time preference. Money is the present good par excellence. Therefore, future goods can be called future cash flows. All else equal, present money is more valuable than future money. This is called the time value of money. The interest rate is the price of present goods in terms of future goods. The interest rate is the price which equates the amount of present goods provided by savers with the amount of present goods demanded by investors. Like all prices, the interest rate is determined by supply and demand. Savers are suppliers of present goods. The supply curve (S) is the quantity of present goods supplied at each interest rate. Factor owners (investors) are the demanders, or buyers, of present goods. The demand curve (D) is the quantity of present goods demanded at each interest rate. The intersection of the supply and demand curve determines the interest rate. The interest rate is determined by the supply and demand for present goods:2

scholarly journals EXPLANATION OF THE BENEFIT OF THE INVESTMENT PROJECT ON THE CASH BASIS / IZRAŽAVANJE KORISTI INVESTICIONOG PROJEKTA NA GOTOVINSKOJ OSNOVI

2019 ◽  
Vol 16 (2) ◽  
Author(s):  
Dijana Kremenović
Keyword(s):  
Growth And Development ◽  
Investment Decision ◽  
Investment Decisions ◽  
Investment Project ◽  
Capital Budgeting ◽  
Investment Activity ◽  
Investment Projects ◽  
Investment Process ◽  
Additional Value ◽  
Cash Basis

Decisions about the choice of investment projects can significantly affect the destiny of the company, its competitive position in the market, market participation, the direction of further technological development, and even the survival of the company. The aim of this paper is, in the conditions of the current economic reality, to point out the significance of the choice of methods of expressing the benefit of an investment project. In this sense, we have explained in detail all currently applicable methods for assessing the viability of investment projects on a cash basis, comparing the good and bad sides of all the methods presented. In this connection, we especially pointed out the importance of the time value of money. The decision to apply the capital budgeting process, certainly, is the decision of the company itself. However, the outcome of investment activity is borne by a wider circle of consumers, which should be a sufficient reason to encourage education and the application of current methods in this area. If you want to realistically look at the investment process and evaluate the justification of an investment project, it is necessary to identify and analyse the effects of exploitation of a particular investment. In order to ensure the realization of the company’s basic strategic goals and thus ensure its growth and development, it is necessary to make decisions in which the company will focus its investment activities on this investment projects whose effects will ensure the highest return on investment. This work deals with the complex issues of making adequate investment decisions using a method for assessing the viability of investment projects on a cash basis. Bearing in mind the significance of investment activity, we can conclude that for the purpose of making a good investment decision, it is necessary to realistically look at the entire investment process and assess the justification of the implementation of the investment project. In this sense, we identify, measure and quantify the overall effects of the realization of a particular investment. Capital budgeting for the purpose of making an investment decision today is a generally accepted concept in developed economies. There is no doubt that there are many disagreements regarding the choice of the methods of assessing the viability of investment investments, and then the selection of criteria within a certain method. However, it is quite certain that the rich experience of developed countries undoubtedly points to the need for capital budgeting, investment project management, with particular emphasis on the use of discounted methods for assessing the viability of investment investment and respecting both economic and non-economic effects. Implicit benefits that the application of capital budgeting brings to the overall growth and development of the company, in terms of reducing uncertainty in making investment decisions, easier ranking of investment projects, exact measurement of expected benefits, transparency of investment activity criteria, attracting investors and ultimately creating additional value and greater degree of realization of strategic company goals.With this work, we pointed out the fact that capital budgeting is crucial in the process of making an investment decision and in that way has influenced enterprises to seriously deal with the choice of the method of estimating the profitability of investment projects that will surely result in additional value for the company.

scholarly journals Bank Loan as a Source of Financing an Investment Project

2019 ◽  
Vol 5 (12) ◽  
pp. 292-297
Author(s):  
S. Belyaev
Keyword(s):  
Russian Federation ◽  
Investment Project ◽  
Bank Loan ◽  
Project Financing ◽  
Investment Projects ◽  
Bank Financing ◽  
Literary Sources ◽  
Fixed Assets ◽  
The Russian Federation

The purpose of this article is to consider a bank loan as a source of financing for investment projects. To achieve this goal, the following tasks were solved: the structure of investments in fixed assets in the Russian Federation by sources of financing was investigated; the forms of bank financing of investment projects are characterized, types of project financing are identified depending on the distribution of risks between the bank and the borrower. During the study, the following methods were used: a review of literary sources, comparison and grouping.

scholarly journals Simulation Modeling in Assessing the Effectiveness and Risk of Investment Projects

2020 ◽  
Vol 22 (1) ◽  
pp. 119-124
Author(s):  
Volodymyr Kharchenko ◽  
◽  
Hanna Kharchenko ◽  
Keyword(s):  
Monte Carlo ◽  
Monte Carlo Method ◽  
Agricultural Production ◽  
Random Number ◽  
Investment Project ◽  
Average Risk ◽  
Universal Method ◽  
Investment Projects ◽  
The Monte Carlo Method ◽  
The Impact

Introduction. The article deals with the modeling features in the implementation of investment projects using the Monte Carlo method. The purpose of the article is to substantiate the feasibility of using economic and mathematical models to identify the risks of investment projects in agricultural production, taking into account the randomness of factors. Results. The expediency of using this method during the analysis of projects in agriculture is determined. This type of modeling is a universal method of research and evaluation of the effectiveness of open systems, the behavior of which depends on the influence of random factors. Particular attention is paid in such cases to decisions on the implementation of investment projects. The expediency of using this method in the analysis of projects in agriculture is determined. The main characteristics of the investment project are considered: investments involve significant financial costs; investment return can be obtained in a few years; there are elements of risk and uncertainty in forecasting the results of the investment project. The algorithm of the analysis of investment projects consisting of various stages is offered. The importance of investigating the risks of investment projects in agricultural production is substantiated. It is investigated that the basis of the Monte Carlo method is a random number generator, which consists of two stages: generation of a normalized random number (uniformly distributed from 0 to 1) and conversion of a random number into an arbitrary distribution law. The task of choosing an investment project for a pig farm is proposed. The calculations revealed that the amount of the expected NPV is UAH 63,158.80 with a standard deviation of UAH 43,777.90. The coefficient of variation was 0.69, so the risk of this project is generally lower than the average risk of the investment portfolio of the farm. Conclusions. The results of the analysis obtained using the method of Monte Carlo simulation are quite simple to interpret and reflect the change of factors over a significant interval, taking into account the probabilistic nature of economic factors. Thus, this method allows the implementation of the investment project to assess the impact of uncertainty on the final result of the project.

scholarly journals Analytical hierarchy process - bocr applied for the best lean project selection for production lines

2020 ◽  
Vol 11 (1) ◽  
pp. 054
Author(s):  
José Antonio De Miranda Lammoglia ◽  
Nilson Brandalise ◽  
Cecilia Toledo Hernandez
Keyword(s):  
Decision Making ◽  
Lean Manufacturing ◽  
Production Management ◽  
Production Systems ◽  
Management Strategies ◽  
Investment Project ◽  
Production Volume ◽  
Production Lines ◽  
Global Competitiveness ◽  
Investment Projects

The scenario of global competitiveness demands more and more of the organizations the search for continuous improvement. For survival, in the face of adverse market conditions, modern production management strategies are essential to make production processes increasingly efficient, lean and sustainable, minimizing losses in their production systems. In this sense, when thinking about changes in production lines, in search of improvements in their process, criteria that provide Benefits, Opportunities, Costs and Risks (BOCR) should be considered. In this way, managers and executives should rely on tools and methods that allow them to guide their decisions in a clear way. The objective of this work is to apply a method of Decision Making with Multiple Criteria to the alternatives of investment projects in production lines in Lean Manufacturing concept. As a general result, it was possible to observe the applicability of the AHP BOCR method for the decision-making case involving several criteria and subcriteria for choosing the Lean investment project in the steel environment, the preferred alternative being the discontinuity of the production line 1 and the absorption of their respective production volume by production lines 2 and 3 through investments in them.

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