The economical analysis for new project is essential to decide adoption of investment proposal.
The future cash-flow is a very important element for such analysis or value evaluation and the elaborate economical analysis, in the unstable future situation of a changing era, is an principal means for decision-making in today's management activity.
payback period method' and 'accounting rate of return method' are typically used for the economical analysis of investment proposal, which do not consider the time-value of cash.
There are 'net present value method' and 'internal rate of return method' as a DCF(Discounted Cash Flow)which means that cash-flow of asset is evaluated and discounted to calculate the present value method.
And they can be used as information for company investment decision through the EVA(Economic Value Added) calculation.
'real option' is another important concept for investment proposal analysis.
It means that investment strategy understands strategic value, which is inherent in the amendment opportunity and the investment proposal, as a option concept. So it maximizes the investment proposal value through amending the future decision-making, improving benefit creation possibility and restricting loss occurrence.
Based on such understanding, the research has been carried on to examine methodology of the economical analysis for investment proposal through 'net present value method' and 'internal rate of return method' with DCF(Discounted Cash Flow) and to study the EVA(Economic Value Added), the 'real option' concept and the theoret-ical method of analysis.
The economical analysis has been performed for investment propriety verification in aircraft component manufacturing company by NPV method on the investment proposal and the estimated cost of future cash-flow. And investment proposal adoption was verified by IRR method through the method of trial and error.
Subsequently, value evaluation was performed on investment proposal with the EVA calculation. After decision of investment, when the investment strategy would be required to be amended according to situation change, it was designed to judge the amendment propriety on investment decision with option analysis inherent in real option.