The investment calculation covers all procedures, which make a rational evaluation of the computingable aspects for an investment possible. In addition the monetary consequences of an investment are to be quantified and consolidated, in order to offer to it constructing a decision recommendation.

The investment calculation is the main decision making aid with investment decisions (>50%). It is for preselection and revision of importance and independent of the investment decision.

Beside the investment calculation further factors play a role for actual transacting of an investment - as with many decision-making processes -. These are coined/shaped technical, legal and economic nature or also by personal preferences.

For the different procedures of the investment calculation the used investment term is crucial:

• Out of the view of the account system it acts with an investment around the transfer of currencies in special and All static procedures are based on this view.
• Within the modern investment theory an investment is regarded as a payment stream of all deposits and disbursements. The dynamic procedures are based on this view.

Classical procedures

Static procedures

With the static methods in each case one period is regarded. For this reason the expenditure for the procurement of the data is small. However the statement quality of the static procedures is critical of seeing for the same reason.

• Cost comparison calculation
• Profit comparative calculation
• Cost accounting
• Amortization calculation

Dynamic procedures

With the dynamic procedures several periods are regarded. The expenditure for the procurement of the data is accordingly high. On the other hand the statement quality is better. The dynamic procedures have the large advantage that them the temporal accumulation of the payment stream by means of calculation of compound interest weights. It applies the principle: Today disposable money is more worth than future.

• Present value method
• Final value method
• Method of the internal interest rate
• Annuity method
• MAPI method

Procedure with complete financial plans

• Investment calculation with complete financial plans ("VOFI ")

Literature

• Roughly, Heinz L.; Introduction to the investment calculation; Vahlen; 5. Edition; Munich 2006. ISBN 3-800-62777-9
• Kruschwitz, Lutz; Financing and investment; 4. Edition; Munich 2004. ISBN 3-486-57608-9
• Perridon, Louis; Steiner, Manfred; Financial system of the enterprise; Vahlen, 13. Edition; Munich 2004. ISBN 3-800-63112-1
• Investment calculation particularly for engineers into the German engineer manual. Engineer as a manager, German engineer publishing house, 2005, ISBN 3-8125-0553-3
• , Gerd trained: Investment. Kolhammer publishing house 1999, ISBN 3-17-015187-8

Articles in category "Investment calculation"

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