Project Investment Analysis and Its Role Essay

Exclusively available on Available only on IvyPanda® Made by Human No AI

Role of project investment analysis

Investment valuation is important in determining the value of the proposed investment in the short term and long term since it provides answers on the net worth of a proposed project. Through investment valuation, it is possible to make clear projections into the future, in terms of the scope of the project and expected returns. In the case of new ventures, project investment analysis provides the basis for the profitability of a project by reviewing the financial implications of a proposed project against expected returns over a specific period of time.

Project investment analysis might paint a clear picture on the practicality of the proposed project against series of investment variables such as cash flows (operating cash flow and terminal cash flow), initial capital outlay, and the duration of the project (Marino, Bertoldi, & Rezessy 2010). Therefore, in new ventures, project investment analysis might either give the green light or raise the red flag on the viability of a proposed project before actual implementation. This means that the analysis is important in safeguarding the interests of an investor before making the decision to either finance the new venture or not.

How investment analysis provides insight into the selection of energy-saving projects

In the selection of energy-saving projects, there are several variables and constraints that must be balanced to ensure that any proposed project is viable and sustainable in the short and long term. Basically, the aspect of viability is determined by the financial needs against expected returns since most of the energy-saving projects require a large amount of capital. The use of project investment analysis in the selection of energy-saving projects might track the variables such as cost constraints in setting up the project against variables such as payback period, annual cash flow, and initial capital outlay (Lisowski 2000). This means that the investment analysis might provide a clear blueprint for adoption or rejection of the capital intensive energy-saving projects on the basis of the generated financial data for present and future streams of cash flow.

Roles played by energy monitoring, targeting, and waste strategies: Financial performance

Energy monitoring

Energy monitoring aspect in implementing energy-saving projects involves proactive and constant review and evaluation of the production capacity against costs and demand to ensure that such projects operate within the optimal levels (Bernstein, Barnes, McCarthy, & Manuel 2005). Maintaining the state of optimal production translates into efficiency in the use of financial resources and maximum output, which translates into more revenues.

Targeting

Targeting is an important variable in balancing the market demand and company production capacity to ensure that energy production is supported by the market demand dynamics to ensure that project operates within the expected capacity, which satisfies the needs of potential customers (Norton 2012). Through targeting, it is easy for a company to improve financial performance since the aspects of supply and demand will be balanced.

Waste strategies

Waste strategies are meant to seal loopholes that generate inefficiencies in the general running of a project. These inefficiencies might seriously compromise the sustainability of a project since they affect the financial performance by increasing the cost of production against constant or even lower output (Räthzel & Uzzell 2013).

Reference List

Bernstein, H, Barnes, H, McCarthy, R & Manuel, T 2005, Program monitoring. Battelle, Columbus, Ohio.

Lisowski, S 2000, Real options in practice: Two examples from the energy sector. Decision Analysis Affinity Group, Calgary, Canada.

Marino, A, Bertoldi, P & Rezessy, S 2010, Energy service companies market in Europe. Institute of Energy, Ispra, Italy.

Norton, M 2012, Sustainability: duty or opportunity for business? Routledge, New York.

Räthzel, N & Uzzell, D 2013, Trade unions in the green economy: Working for the environment, Routledge, New York.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2020, June 28). Project Investment Analysis and Its Role. https://ivypanda.com/essays/project-investment-analysis-and-its-role/

Work Cited

"Project Investment Analysis and Its Role." IvyPanda, 28 June 2020, ivypanda.com/essays/project-investment-analysis-and-its-role/.

References

IvyPanda. (2020) 'Project Investment Analysis and Its Role'. 28 June.

References

IvyPanda. 2020. "Project Investment Analysis and Its Role." June 28, 2020. https://ivypanda.com/essays/project-investment-analysis-and-its-role/.

1. IvyPanda. "Project Investment Analysis and Its Role." June 28, 2020. https://ivypanda.com/essays/project-investment-analysis-and-its-role/.


Bibliography


IvyPanda. "Project Investment Analysis and Its Role." June 28, 2020. https://ivypanda.com/essays/project-investment-analysis-and-its-role/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1