Analysis of influence of input data, method of financing and methods used for financial evaluation of investment

Abstract

This paper focuses on the firms' approach to processing feasibility studies, especially the part related to the evaluation of an investment project efficiency. On a particular case it shows the influence of chosen method on the decision on acceptance or rejection of a project. It also points to other factors that may affect the result of project efficiency evaluation, particularly to unrealistically planned cash flows, poorly chosen discount rates, or ignorance of using the rules for taking inflation into account. Final findings unambiguously show the necessity of post-auditing as a means of verifying the correctness of input assumptions and finding the causes of deviations occurred. The presented conclusions can be generalized and even extraction of mineral resources is no exception.