The investment cycle concerns the acquisition and use of fixed assets necessary for the development of the company's business.

........................................: aims to increase

productivity by introducing modern and advanced equipment,

The present value (PV) corresponds to

Is NPV the best criterion for choosing an investment?

Net present value (NPV):

An investment project is characterized by a NPV = -2.4384.

This project is considered:

Given that the net present value of a project is NPV = -2.4384 and its PI = 0.987808,

What would be its initial investment Io:

A company would like to invest in a machine costing 20 000 DT. Its useful life is estimated at 5 years. According to forecasts for this investment, the company would report a gross result of -10 000 DT in the first year and would be taxed at 15%.

A company plans to invest in an industrial machine to be imported from China.

Its price is 100 000 TND. Customs clearance costs amount to 12 500 TND, and transport costs are 5 000 TND.

A Chinese engineer had to travel to provide training to the technicians responsible for the new machine. He will be paid 22 500 TND, including travel expenses.

This investment would have the following net cash flows over its lifetime:

Year 1: Discounted cash flows = 53 000 TND

Year 2: Discounted cash flows = 68 000 TND

Year 3: Discounted NCF = 47 000 TND