Scribd
Upload
6 views21 pages

MIP22 Lesson 1

The lesson defines investment as the process of allocating assets to generate future profits and distinguishes it from consumption expenditure. It discusses various forms of investment, factors influencing investment activities, and categorizes different types of investment activities. Additionally, it outlines investment criteria, features, and types of capital investment projects, while providing a brief definition of management.

Uploaded by

wiktorszte2001
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
6 views21 pages

MIP22 Lesson 1

The lesson defines investment as the process of allocating assets to generate future profits and distinguishes it from consumption expenditure. It discusses various forms of investment, factors influencing investment activities, and categorizes different types of investment activities. Additionally, it outlines investment criteria, features, and types of capital investment projects, while providing a brief definition of management.

Uploaded by

wiktorszte2001
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 21

lesson1

THE CONCEPT AND GENERAL


CHARACTERISTICS OF INVESTMENT
THE PURPOUSE OF A LESSON

The purpouse of the lecture is to define


the concept of investment and the
classification of investments according
to various criteria
DEFINITION OF INVESTMENT

Investment as
a process of putting assets into any
action to make a profit in the future
a monetary asset purchased with the
idea that the asset will provide income
in the future or will later be sold at a
higher price for a profit.
DIFFERENT TYPES OF RUN OF PROCESS OF INSERTING
ASSETS AND RECEIVING PROFITS

Consistent Assets putting in


Profit getting

Parallel Assets putting in


Profit getting
Interval Assets putting in
Profit getting
FORM OF INVESTMENT

 Money
 Physical capital
 Goods
 Other investment assets
THE DIFFERENCE BETWEEN INVESTMENT AND
CONSUMPTION EXPENDITURE

The investment objective is a obtain of profits

The objective of consumption expenditure is


an appeasing of needs
THE FACTORS THAT EFFECT ON AN INVESTMENT

 The inflation rate


 The interest rate
 The part of the savings-income
households
 The profit rate
THE RELATION BETWEEN FACTORS AND
INVESTMENT ACTIVITIES
Investment Investment

In the event of high inflation, we must At a high interest rate, the cost of obtaining
external
cover not only the investment costs but financing sources (for example, a bank loan)
also losses caused by the decline increases. we must cover not only
in the purchasing power of money the investment costs but also the
costs
of using external sources

inflation rate interest rate


Investment Investment

When households increase The increase of the profit rate


the share of savings in their stimulates an investment activities
income, the amount
of capital allocated
for investing increases

the part of saving in income Profit rate


INVESTMENT CRITERIA
 a time: short-run and long-run
investments
 a type of investor participation : direct
and indirect investments
 a form of ownership : private, state,
foreign, joint investments
 an inserting an object costs : real and
financial investments
FEATURES OF INVESTMENT

Safety of Principal
Adequate liquidity and collateral
value
Stability of income
Capital growth
Tax Benefits
Purchasing power stability
Concealability
PERCEPTIONS OF INVESTMENT

 Financial Perception
 Economic Perception
 Social Perception
CATEGORISATION DIFFERENT TYPES OF INVESTMENT ACTIVITIES

Diversification – appraising the


soundness of investment into new
products/services.
CATEGORISATION DIFFERENT TYPES OF
INVESTMENT ACTIVITIES

Cost saving – some investment


activities are expected to result in cost
savings
(for example, the office automation),
and such decisions need appraisal just
as diversification and expansion of
product lines
.
CATEGORISATION DIFFERENT TYPES OF
INVESTMENT ACTIVITIES

Replacement – not all investment


decisions result in net additions to the
capital stock, so deciding whether and
when to replace existing capital
(equipment and building) constitutes
another type of consideration in
investment appraisal.
CATEGORISATION DIFFERENT TYPES OF
INVESTMENT ACTIVITIES

 • Research and Development – this can


affect enterprise productivity,
competitive position and, ultimately,
financial performance. These activities,
too, need appropriate assessment
before resources are devoted to them.
CATEGORISATION DIFFERENT TYPES OF
INVESTMENT ACTIVITIES

 • Alternative choice – this type of


investment decision requires choosing
between alternatives that achieve the
same ends (e.g. purchasing
‘outsourced’ inputs from an external
supplier or else producing the good or
service in-house).
CATEGORISATION DIFFERENT TYPES OF
INVESTMENT ACTIVITIES

Financing – comparison of the benefits


of purchasing an asset against leasing
it.
CATEGORISATION DIFFERENT TYPES OF
INVESTMENT ACTIVITIES

Others – such as expenditure on


complying with health and safety
standards, a pollution control device,
etc.
TYPES OF CAPITAL INVESTMENT PROJECTS

 New Products or New Markets


 Expansion of Existing Products or
Markets
 Replacement Project Necessary to
Continue Normal Operations
 Replacement Project Necessary to
Reduce Business Costs
DEFINITION OF MANAGEMENT

Management is a system of methods,


techniques, ways to impact on the resources
of the organization for ensuring of achieving
the established objectives.
REFERENCES
 K.Kogon, S.Blackmore, J.Wood. Project
Management for the Unofficial Project
Manager. BenBella Books , 7th Edition,
2015, ISBN194163110X.
 E.Verzuh. (2015),The Fast Forward MBA
in project management. J.Wiley & Son3,
528 s. ISBN: 9781119086574

You might also like