THE ROLE OF THE SELECTION CRITERIA IN SUBSTANTIATING INVESTMENT DECISIONS

Abstract

Making investments-making at entity level has a significant role in achieving the objective of maximizing its value for the benefit of both its shareholders as well as its managers and creditors. Starting from the importance of the investment decision, a significant problem is the optimal selection of the investment, i.e. the selection of the best projects from the existing versions, taking into account the funding sources involved and, at the same time, the recovery of the expenses. In this respect, it is necessary to apply the selection criteria correctly in substantiating the investment decision, funding sources.

Keywords

• investment decision
• selection criteria
• discount rate
• cash-flow
• net present value