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A systematic approach for the analysis of the economic viability of investment projects

Author

Listed:
  • José Donizetti De Lima
  • Marcelo Gonçalves Trentin
  • Gilson Adamczuk Oliveira
  • Dayse Regina Batistus
  • Dalmarino Setti

Abstract

This paper aims to present a systematic for the analysis of the economic viability of investment projects (SAEVIP) in fixed assets. In the literature, it is possible to identify the fundamental elements to evaluate the merit of the investment project (IP). To assess the dimension 'return', indicators are analysed: net present value (NPV), NPV annualised (NPVA), index benefit/cost (IBC), return on investment annualised (ROIA), index ROIA/minimum rate of attractiveness (MRA) and return on investment (ROI). An indicator analysis for dimension 'risk' is performed by internal rate of return (IRR), Payback, index MRA/IRR, index Payback/N and Fisher point. In addition, a joint assessment of indicator of risk and return is performed. A sensitivity study is promoted on the main variables involved in economic performance of the IP (MRA, costs and revenues). To validate the SAEVIP proposal, a case study shows the wealth of information generated by the application of this systematic.

Suggested Citation

  • José Donizetti De Lima & Marcelo Gonçalves Trentin & Gilson Adamczuk Oliveira & Dayse Regina Batistus & Dalmarino Setti, 2015. "A systematic approach for the analysis of the economic viability of investment projects," International Journal of Engineering Management and Economics, Inderscience Enterprises Ltd, vol. 5(1/2), pages 19-34.
    • Handle: RePEc:ids:ijemec:v:5:y:2015:i:1/2:p:19-34
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    Cited by:

    1. Ndeto, Martin Paul & Njoka, Francis & Wekesa, David Wafula & Kinyua, Robert, 2024. "Mechanisms and economics of a self-powered, automated, scalable solar PV surface cleaning system," Renewable Energy, Elsevier, vol. 226(C).
    2. Guilherme Bolico Pletsch & Dalmarino Setti & José Donizetti de Lima & Gilson Adamczuk Oliveira & Tatiana Colombo Pimentel, 2023. "A Multi-Criteria Model for the Techno-Economic Evaluation of Fat Removal Technologies From Dairy Waste," SAGE Open, , vol. 13(2), pages 21582440231, June.

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