Let's consider application of the stated methods of the analysis of efficiency of capital investments on the example of the investment project on purchase of the equipment for production of natural juice and soft drinks.
where CIF - an entrance cash flow, i.e. receipts of money into the account of the enterprise in a timepoint of t, COF - an output cash flow, i.e. payments of the enterprise in a timepoint of t, T - duration of the investment period, Er - required internal effectiveness ratio of the investment project.
first of all on Npesli indicator at firm own capital is limited and it has no broad access to the loan capital, then a main objective of firm - receiving the greatest gain on its limited capital. In this case for IRR firm will be the main indicator of efficiency of the project.