RATIONALE FOR BORROWING FOR INVESTMENT PROJECTS
Journal Title: Проблеми і перспективи розвитку підприємництва - Year 2014, Vol 1, Issue 6
Abstract
The article deals with the economic rationale of borrowing for investment projects. A comparative description of the main sources of borrowings – bank loan and leasing. Based on the calculation of the present value of cash flows under financial leasing and using long-term bank credit the author proved that investigated the company be more profitable to use the extra capital by attracting leasing. This allows maintained a close relationship between producers and consumers of equipment. The paper analyzed and calculated the cost of each source of financing of the project and identified the most profitable option. The subject of the study is a set of theoretical and methodological approaches and practical issues that arise in the process of financing the reproduction of fixed assets of the company. The aim of the paper is to investigate the process of reproduction of fixed assets of the company and justify the selection of the most effective sources of financing of the project. The study used the following methods: abstract- logical (theoretical synthesis and report writing), Statistics and Economics (analysis of the processes of reproduction of fixed assets and the sources of its finasuvannya). Formulated and justified position, conclusions and recommendations for fixed assets can be practically used in the confectionery industry enterprises of Ukraine. For the feasibility study of borrowing to finance economic activities should compare the price of debt sources. The author has shown that investment resources contributes to the expanded reproduction of fixed assets, fixed assets are an integral part of the production process, which depends on its successful operation.
Authors and Affiliations
Bogdan Gerasimenko
Keywords
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