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Abstract

Table of contents

Introduction

In the context of economic globalization and the emergence of hypercompetition, characterized by a fierce international struggle and a rapidly shrinking life cycle of products, the most important quality is not only an effective production and business activities, and even basic survival is flexibility and adaptability for any company.

At the moment the problem of development becomes paramount, becomes the core of the entire economic policy, sets the contours of all strategic decisions. The development is part of the most important functions as a separate entity, and the state as a whole.

Any company, regardless of the nature of the activities, should take care of the development of production, updating equipment, technology, to think about tomorrow, to ensure the market success of goods and services. The team, living only for today, dooming the company for bankruptcy. But good luck to the future demand of today's costs.

Development of an enterprise needs to manage: it is necessary to have a program of development, system of monitoring its implementation, funds for implementation.

1. Theme urgency

The relevance of the topic due to changes in industry caused by technological progress and system changes in conditions of instability. The introduction of new production technologies, innovative methods of management and control will contribute to the sustainable development of enterprises for many years. Those businesses that will be able to take it on Board to be competitive and successful in the foreseeable future.

2. Goal and tasks of the research

The aim of the study was to identify the areas where the impact of investments on development of industrial enterprises.

Based on the objectives of the study were identified the tasks that need to be addressed:

- analysis of existing methods of evaluation of investment efficiency;

- determine the main directions of investment activity;

- to consider the complex impact of investments on development of industrial enterprises;

- justify the investment in enterprise development;

- calculate the necessary size of investment flows to the introduction of new production capacities;

- to analyze the results of investment activities.

Research object: the development of industrial enterprises.

Research subject: methodology of estimation of efficiency of investments as factor of development of industrial enterprise.

3. Sources overview

Investment and enterprise development are closely connected. Investments the company needed to modernize their equipment, improve product quality [1], or increase the production capacity [2].

3.1 World sources overview

Successful investment in the development of enterprises is one of the main tasks in the economy of all countries of the world. There are specialized financial portals that include news, Analytics, forecasts, current quotes of the financial market [3-6], which can help investors to analyze the financial situation of the global market.

3.2 National sources overview

Among domestic researches of problems of development of industrial enterprises by attracting investments you can mark articles Mizuna VI [1-2], the works of M. I. Rimera on the economic valuation of investment activities [7], the domestic investment portals [8-10], statistics [11-12].

3.3 Local sources overview

In the Donetsk National Technical University, subjects of investments and development companies working in the Hobta V. M., Shilova O. Y., Meshkov A. V., Rozumna N. V.

Hobta V. M. together with the masters of yesteryear did research in the area of investment and enterprise development:

  1. Baskevich, Y. V. "the Justification of directions of development of industrial enterprise";
  2. Klekovkina T. V. "increasing the investment attractiveness of the enterprise based on the development of its intellectual capital";
  3. Timoshenko V. N. "Feasibility study of investment processes".

Meshkov V. was engaged in research in the field of investment attractiveness and investment activity of enterprises:

  1. Grygierczyk S. V. "Enhancement of investment attractiveness of innovative enterprise";
  2. Zverev A. Y. "Improvement of management of investment activity of the enterprise."

Shilova L. I. has conducted research in the field of management of enterprise development and investment management:

  1. Thunderace E. V. "Investment strategy in managing the development of enterprise";
  2. Zolotukhin, V. B., "Management of investment activity at the enterprise".

Rozumna N. In. doing research in the field of investment attractiveness:

  1. Peschanskaya, A. S. "Evaluation of investment attractiveness of coal mines".

4. Development of industrial enterprises

Development is a universal phenomenon which is difficult to give a precise and clear definition. Development is an inherent part of the existence of any system. In the General scientific sense, the development of "there is a change of state that occurs when maintaining their bases, i.e., a certain initial state, generating new States" [13]. Development is not individual changes, but many, a complex system of changes in the composition of elements and structure.

The main features of development:

  • qualitative changes
  • their irreversibility,
  • orientation.

    There are two forms of development – evolutionary (gradual qualitative and quantitative changes) and revolutionary (abrupt transition from one state of matter to another). Or isolated progressive and regressive development.

    The development of organizations due to the following factors:

    1. Changes in external environment (Economics, politics, ethics, culture, etc.);
    2. Changes in the internal environment (the transition to the new technology, movement of workers etc.);
    3. The needs and interests of the individual and society (the need for expressing oneself, the need for the surplus product of society, etc.);
    4. Aging and wear and tear of tangible elements (equipment, human, technology);
    5. Ecology;
    6. Technological progress;
    7. The global state of the world's civilization.

    The successful development and growth of the organization can lead to the syndrome of big business, which is characterized by the following features:.

  • highly centralized and bloated administrative apparatus;
  • comprehensive system of special forms and procedures for making daily decisions;
  • increase in the number of all kinds of meetings for the elaboration of these decisions;
  • the transfer of solutions and responsibility from one Department to another.

    There are different views on the concept of economic development at the micro level, however, most of the authors notes that development is primarily a process of improving efficiency.

    5. Assessment of efficiency of investments in the UNIDO methodology

    The United Nations industrial development organization (UNIDO) has developed a methodology to assess investment projects, which is recognized by specialists around the world. She is versatile, that is suitable for all fields of activity in almost any conditions. The flip side of flexibility lack of flexibility and lack of consideration of local conditions. However, first steps is not so important. It is extremely valuable that the projects UNIDO is clear to Western investors as terminology and structure.

    In the list of key evaluations it is possible to allocate Net present value (NPV), profitability index (PI), internal rate of return (IRR) and payback period (PP) project.

    Net present value is found by subtracting the discounted cash flows plus the present value of the investment:

    If NPV > 0, project is profitable and can be accepted. However, there are projects for which NPV = 0, then it is accepted if it is not about monetary profit, and some of the effect (social, environmental).

    The profitability index is determined by the relationship of the discounted cash flow to the value of discounted investments:

    In this assessment the project is accepted if the value of PI > 1.

    Following evaluation of the project is the internal rate of return:

    Here r1 and r2 are the rates corresponding to some positive (NPV1) and negative (NPV2) the net present values of income. The smaller the interval r1 – r2, the better the result.

    The criterion for acceptance of the investment project is exceeding the target IRR of the selected discount rate (IRR > r). When comparing several projects, more preferred are projects with large values of IRR.

    The undoubted advantages of the IRR indicator is its versatility as a tool for evaluating and comparing the profitability of various financial transactions. Its advantage is the independence from the discount rate is a purely domestic measure.

    With a uniform distribution of projected income simple payback period of capital investments is calculated according to the formula:

    where K is a one-time capital costs;

    D – annual income from capital.

    f there is an uneven distribution of the projected income payback period is calculated by direct counting the number of years (months, quarters), during which the investment will be repaid the cumulative income, i.e.:

    Some experts in calculating the PP is still recommended to take into account the time aspect. In this case, the calculation of the cash flows discounted at the index price of the advanced capital. It is obvious that the payback period increases.

    Image 1 – Evaluation of the effectiveness of the investment project

    (The number of frames - 5, the size of the animation - 31 Kbyte)

    Conclusion

    In the course of work were analyzed the activities of the company.

    Conducted economic evaluation of the profitability, but also offered recommendations for reducing the level of cost.

    Proposed activities to improve labor productivity, reduce the complexity and sustainable development of the enterprise.

    This master's work is not completed yet. Final completion: June 2018. The full text of the work and materials on the topic can be obtained from the author or his head after this date.

    References

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    2. Мизюн, В.А. Интеллектуальная оценка эффективности инвестиций в развитие производственных мощностей [Электронный ресурс] / В.А. Мизюн. – Режим доступа: https://cyberleninka.ru/article/v/intellektualnaya-otsenka-effektivnosti-investitsiy-v-razvitie-proizvodstvennyh-moschnostey.
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