Project Evaluation Practice

Author: Zhou Tianhua
Publisher:
Publish Date: 2005-06-24
Features: This book systematically proposes a new method for discount rates in the core theory of project evaluation for the first time. It suggests using the remaining net cash flow of each year of the investment project, discounted at a rate of the predicted nominal interest rate of banks minus the predicted inflation rate, as the new discount rate. By discounting and summing the net present value (NPV) using this rate, the results will align with the direction of inflation or deflation in social funds, making the project evaluation outcomes more accurate and reliable. Its practical significance and impact are no less than the contribution of the mathematical optimal method to enterprises and the entire national economy. The book comprehensively and thoroughly elaborates on the practical operational methods of investment project evaluation, starting from the necessity of the project and emphasizing the alignment of the project with the market, highlighting the new perspective that in a market economy, projects earn money from market users. It then analyzes and discusses the project scale, production technology, and micro-financial economic benefits. In the financial analysis, it progresses from data collection to the analysis of financial statement indicators, from simple to complex. It also discusses the comparison and selection of different projects, three methods of project risk analysis, and introduces the national economic benefit analysis of projects based on the micro-analysis, emphasizing that "the project system is a subsystem of the market system." Finally, it introduces post-evaluation of projects and the issues that should be noted. This book can serve as a core textbook for undergraduate management majors, a reference book for loan banks in evaluating investment projects and making project decisions, and can also be used as a reference book for general economic and management personnel. The book provides an insightful and comprehensive explanation of the key and difficult issue of net present value (NPV) in project evaluation and, for the first time domestically and internationally, proposes a new insight into the method of discount rate selection, which is to subtract the inflation rate from the discount rate of each year of the investment project to calculate the net present value of that year, and then sum up the net present values of each year to obtain the net present value of the entire operating period of the project. This reflects the true value of the remaining funds for the project under the real economic development changes of society. This achievement has been praised by relevant experts and recognized by Professor Wang Jue, a famous economist and professor at the Central Party School of China, thus making significant contributions to evaluating the economic benefits of projects and the authenticity of the value of funds achieved by projects.