JUSTIFICATION OF MANAGEMENT DECISIONS IN THE CHOICE OF INVESTMENT PROJECTS, FINANCIAL ASPECT

Abstract

The essence and significance of substantiation of investments in large social and ecological projects and problems of evaluation of the efficiency of such projects are revealed. Various investment projects financed from the budget of all levels are subject to the state examination, which is carried out by authorized public authorities. Investment projects, regardless of the sources of financing and forms of ownership of capital investment objects, are subject to examination before their approval, in particular, ecological examination. The decision to evaluate the investment project is to determine the different types of the effectiveness of the investment project: social, commercial efficiency of participation in the project. The effectiveness of participation in the project, in turn, includes efficiency for participating companies, efficiency for shareholders of participating companies, budget efficiency. In this case, "efficiency" means the extent to which the implementation of this project meets the purpose and interests of its participants, as well as those directly affected by the implementation process.Therefore, it is necessary to select the criteria for evaluating investment projects, which will be the basis for management decisions. Substantiation of economic efficiency of the investment project is characterized by a system of indicators that reflect the ratio of costs and financial results of the project. Costs and other results of the project in the calculations of economic efficiency are expressed in the form of cash flow. The main methods of investment project analysis and their essence, advantages, and disadvantages are analyzed in the article. To determine the price of risk, it is recommended to use indicators that take into account both the possibility of an adverse event and the amount of damage from it. Such indicators may be variance, standard deviation, and coefficient of variation.For the possibility of economic interpretation and comparative analysis of these indicators, it is recommended to translate them into the monetary format. The complex of investment project estimation with the aim of risks minimization is suggested.