What is an investment problem?
The investment problem arises in different ways in the company. The investment decision can relate to:
An individual investment whose advantages must be assessed without there being any alternative investments for it, e.g. B. if a special machine is only offered by a single company. If it is not advantageous, the investment property may not be procured, depending on the urgency of the need.
The selection problem that arises when there are multiple investment alternatives, as is typical of most investment decisions. It must be determined which of the alternative investment objects is the cheaper or cheapest, e.g. B. if three manufacturers offer a lathe with specific technical data.
The replacement problem, which concerns the question of when it is advantageous to replace an investment object that is still in use and that can still be used technically with a new, similar investment object.
Reasons for replacing an old investment with a new one can be rising repair costs, an increased scrap rate, a decreasing quantitative or qualitative capacity or a declining quality of the products.
In order to assess an individual investment or to be able to cope with the selection or replacement problem, the investment calculations are used, which are differently suitable for the solution of the individual problems. These are calculation methods, the purpose of which is to determine whether an investment object corresponds to the objective of the investor and which of several investment objects best meets the objective.