Advantages and Limits of the Economic Efficiency Indicators of the Investments - a Comparative Study

Author:University Lecturer, Ph. D. Daniela CIOLPAN

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Keywords:Investment, efficiency, net present value, internal rate of return

Abstract:
Investments have a complex rule in the economy, in general, and especially of the entity level. They are a real support of the economic and social development. In order that the investments realized within entity to reach their goal it is necessary to evaluate the economic efficiency of each investment project and to choose the most efficient one. \r\nIn evaluating the economic efficiency of the investments is necessary an indicators system, because each of them surprises a certain criterion of economic efficiency. In this study we will present the main economic efficiency indicators of the investments, identify the advantages and limits of every indicator in the selection of the investment projects. The indicators analyzed are in accordance with the concept of economic efficiency, they realize a comparison of the obtain results with the consumption resources: net present value, internal rate of return, payback period, profitability index.

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