Definition of profitability comparison calculation
The profitability comparison calculation enables the determination of the absolute advantageousness of investment objects, since it takes into account the required capital investment, which is the case with the cost comparison calculation and Profit comparison calculation does not happen, which only allow statements about the relative advantageousness.
The profitability comparison calculation can be used to assess:
- The advantageousness of an individual investment object, which is given when its profitability equals or exceeds the minimum profitability set by the company.
- The advantageousness of alternative investment objects, whereby the investment object is the more advantageous, which has the higher profitability.
- The advantages of replacing an old investment with a new one.