Regarding investment calculation issues
Thread Content
I would like to ask the experts: How are the return on investment, profit margin, and payback period for a project calculated? Or how is their relationship connected? Thank you. This post was last edited by laiqi on 2009-2-18 at 14:54.]
http://bbs.hcbbs.com/viewthread.php?tid=102279&highlight=%BB%AF%B9%A4%BC%BC%CA%F5%BE%AD%BC%C3 There is a very detailed explanation there.
Both the investment profit rate and the investment profit margin are static evaluation indicators among the financial evaluation indicators for a project. The investment payback period, on the other hand, is divided into the static investment payback period and the dynamic investment payback period; the former is a static evaluation indicator, while the latter is a dynamic one. For their definitions, please refer to: http://bbs.hcbbs.com/viewthread.php?tid=325605&page=1#pid1647657. The return on investment, the rate of profit on investment, and the return on equity all fall under the category of indicators of investment returns; they are static metrics used to assess the profitability of an investment per unit of capital invested. A project is considered viable when its return on investment is greater than or equal to the industry’s average return on investment, or the minimum return rate required by the investors. Regarding the static payback period, a project is feasible only if it is less than or equal to the benchmark payback period ； As for the dynamic payback period, as long as the investment can be recovered before the end of the project’s life cycle, it indicates that a reasonable return has been achieved, meaning the project is viable. For reference!
Design institutes usually have specialized software, so it’s fast. It’s very troublesome to calculate manually, especially the internal rate of return, which requires the trial-and-error method.