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Major Errors in Financial Calculations of the Investment

Being engaged in finance and especially conducting financial and economic calculations, none of us is immune from mistakes. Even the major experts sometimes make mistakes, but say nothing about those who work in the field of finance is relatively recent.

In this article we will try to highlight the most typical and common mistakes:

1. Errors that are permitted rash depreciation. Typically, such errors are in the 80-90% of the projects.

2. Errors associated with the tax burden of the project. For example, often are not made payments of property tax are not included value added tax, properly executed the size of benefits for income tax and TL

3. Errors associated with incorrect definition of recurrent expenditure on the project. Often one-time investment costs are equal to capital investment. It absolutely does not take into account the need to increase working capital, hiring and training personnel who will perform the work, and much more. Even despite the fact that such items are present in the business plan but in another section, to avoid this error must be remembered that non-global nature of the investment costs as well require investment finance.

4. When developing an investment project is not happening accounting for depreciation previously imposed finance, which leads to an overstatement of profits, which allegedly obtained from the project.

All of these shortcomings and mistakes are often globally distort the results of the project, which in turn can have negative consequences for you and for your project.

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