Methods Indicators Equivalence for Economic Research of the Long-Term Capital Investment Project

Sorin-Iuliu Mangu () and Ilie Răscolean ()
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Sorin-Iuliu Mangu: University of Petrosani, Romania
Ilie Răscolean: University of Petrosani, Romania

Annals of the University of Petrosani, Economics, 2013, vol. 13, issue 1, 173-182

Abstract: In economics, projects having an economical life more than a yearlong are considered log term investments. An economic study of these projects cannot skip over the fundamental criteria represented by the economic indicator known as the “invested capital return”. The trend of merging of the most important methods for economic study of long term investment projects have led to defining four fundamental methods: the internal rate of return method; -the explicit reinvestment rate of return method; the annual value method; the present value method. We could demonstrate the equivalence of these indicators for projects that allow application of these four methods.

Keywords: long-term capital investment projects; economic study; internal rate of return; explicite reinvestment rate of retourn; annual value; present value (search for similar items in EconPapers)
JEL-codes: O16 O22 (search for similar items in EconPapers)
Date: 2013
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