Financial Closure of the Project
Introduction
In administration, a project arises from the need to solve problems and an investment project arises from the need of some individuals or companies to increase sales of products or services. Currently there are many tools such as project evaluation, which allow us to establish its disadvantages in addition to establishing if it is not profitable or if it is not feasible.
Definition
The investment project can be defined as a set of activities that are carried out in a specific period of time in which resources are involved with the purpose of solving a problem, satisfying a need or taking advantage of an opportunity. It is also defined as the package of investments, inputs and activities designed to eliminate or reduce various development restrictions, to achieve products, services or benefits in terms of increasing productivity and improving the quality of life of a group of beneficiaries. The importance of the Planning process within the construction of an investment project is essential and has many benefits.
Project evaluation
Project evaluation is an economic tool that helps us in the analysis of an investment project, it will yield several results with which decision making will be easier, although there are several types of projects, the methodology tends to be the same.
Importance of project evaluation in new ventures
For new ventures, project evaluation is crucial because it helps entrepreneurs:
Project evaluation considers risk and uses methods based on expected return and risk. This includes analyzing the payback period, the Internal Rate of Return (IRR) and the Net Present Value (NPV) to ensure that the project is profitable and evaluate the quality and risk of the investment.