Use of an investment payback period in order to analyze project effectiveness

This article analyzes one of the key factors of project effectiveness; the investment payback period. For different conditions of project financing and the subsequent profit from its implementation, calculating formula are derived that facilitate the analysis of the effectiveness of the investment project. The main content of this work is the suggestion and explanation of the generalized factor of increasing profits, which, in our opinion, is the most objective criterion of project effectiveness. The method works well in situations when investments involve a high degree of risk, therefore, the shorter the payback period is the less risky the project is. This situation is typical for industries or activities that are characterized by a fairly high probability of rapid technological change. The suggested generalized index of the growth of an income can be recommended for the ana-lysis of the effectiveness of an investment project in all cases.