Economic Efficiency Assessment as an Investment Control Tool

Abstract

The paper analyzes the acute problems of developing investment controlling tools to measure economic efficiency of investment projects. It substantiates the point that investment controlling is a necessary management tool, embracing generation, analysis and control of invesment projects. As financial crises and market collapses are becoming more and more frequent, the paper reveals the significance of the components of the effect, related to the public and social importance of projects. The opinions on how the mechanism of investment activities could be improved and how the latter are connected with classical management functions are reviewed. The specifics of individual phases of the investment project cycle are characterized. It is noted that the value of detailed investment budget cannot be overrated, the same as their computer models with application of standard or specialized software. Guidelines are laid down to systematize an algorithm of project selection. The features of the existing methods of investment appraisal are put together, their comparative and critical analyses are given. It is reasonably concluded that principally new approaches must be developed to assess economic and public efficiency of investment projects. Hence, it is mentioned that public efficiency analysis called Cost Benefit Analysis can be applied. Information is provided about successful adaptation of the above method to the Russian conditions on the example of one large regional project. The final part of the paper contains the description of the developed financial model of the investment project, which can be used to measure, to a greater extent, how the changes occuring in the external and internal environment influence the project under consideration.