In this article the authors reason facilitation of modified rate of complex percent as an index of efficiency of investments into innovative projects, as it allow one to compare a level of economic efficiency of innovative projects with market income rates of other investment tools.
According to modern popular indexes of economic efficiency of investments into innovative projects that have spread widely (clean money flow, recoupment period, and clean concluded income), it is impossible to define an expediency of investing into a project. None of these indexes has the totality of features that are typical for a universal index of economic efficiency of investments into innovative projects, particularly:
1) consideration of time factor;
2) comparing income rate of projects with different realization period;
3) comparing income rate of projects of different scales;
4) comparing income indexes with market tools of investment.
In this case we find it reasonable of use modified rate of complex percent (MRCP) as an index of economic efficiency of investments into innovative projects:
(1)
The function has the range of definition (–∞; +∞) and is odd. Table 1 provides systematized possible variations of an innovative project results according to using the index of MCPR as a criterion of economic efficiency of investments into an innovative project.
Using modified rate of complex percent as an index of economic efficiency of investments into innovative projects allow us to solve the problem of comparing income rate of projects with different periods of realization and of different scales. Besides, a received value of average annual income rate of owned capital can be compared to other tools of investments (bank deposit, investments into shares or obligations, etc.), as it demonstrates average annual growth of an investor’s capital.
Table 1
Scenarios of economic activity of investments
|
NCF |
Income rate |
Final result |
|
NCF > I0 |
MRCP > r0 |
Income over the required level |
|
NCF > I0 |
0 < MRCP < r0 |
Income below the required level |
|
0 < NCF < I0 |
MRCP < 0 |
Losses in terms of investments |
|
NCF < 0 |
MRCP < n is a period of a project realization |
Project bankruptcy |
,
In order to solve the problem of defining economic efficiency of investments into an innovative project, we use innovative-investment project JSC «Geomash». Schigrovskoye JSC «Geomash» specializes in projecting and producing commercial drilling machines. The company produces a wide range of mobile drilling facilities and equipment for drilling hydrogeological slits, engineering searches, static probation of soils, drilling for constructions of all types of piles in building, spying for firm raw minerals, seismic measurements of oil and gas on continents and shelf sea, and also aggregates for deepening vent screw anchors while fixing standing ropes of drilling towers.
Table 2 represents comparison of some plan and expected values of basic efficiency indexes of investing into the project JSC «Geomash», considering risk factors [1].
Table 2
Basic indexes of economic efficiency of innovative-investment project JSC «Geomash»
|
Index |
Unit of measurement |
Plan |
Expected value,considering risks |
Range of oscillation (p = 95 %) |
|
|
Bottom limit |
Top limit |
||||
|
NCF |
Millions rubles |
297,2 |
177,1 |
–101,1 |
417,4 |
|
NPVr = 10 % |
Millions rubles |
146,5 |
73,3 |
–96,1 |
216,3 |
|
Period of expediency |
years |
4 |
4,5 |
– |
3,5 |
|
MRCP |
% |
18,2 |
11,6 |
–7,8 |
22,3 |
As calculations show, expected values of investment’s economic efficiency considering risk factors are significantly lower than planned values are.
Results of modeling investment process show us a significant underestimation of possible risks that can occur while constructing a basic plan of money flow.
Implementation of the suggested approach towards carrying out the process of modeling multiple scenarios of realizing an investment project helps us to form a complete evaluation of economic efficiency of an innovative project. Besides, information on probabilistic characteristics of investment results create a basis for a high-quality estimation of a project’s investment risk.
The work is submitted to the International Scientific Conference «Science and education pressing questions», Russia (Moscow), May, 21-24, 2013, came to the editorial office оn 13.05.2013.