Investment Design
DESIGN CAPITAL INVESTMENT TO:
Account for dynamic constraints to balance incompatible targets.
Design resources, processes, variables, parameters and targets completely.
Test performance by simulating targets and constraints.
Use prices, promotions and operating volumes as parametric decision variables.
Adjust customer service level to achieve strategic profitability.
Save time by reducing analysis and decison making time from weeks to hours.
USE PARAMETRIC INVESTMENT DESIGN TO MAKE DYNAMIC DECISIONS.
Design the parameters of the investment by decomposing the investment into:
- Investing comapnies
- Investment projects
- Project departments
- Depreciation rates and their groups depending on the nature of fixed assets
- Currencies of the outlays
- Outlay months
- The starting month of depreciation when the on-going investment item transforms into a fixed asset
- Depreciation expense is posted at the Income Statement automatically
- The fixed asset is separated from “on-going investments” and is placed under relevant “fixed asset group”
- Incentive Measures of the public authorities
Capitalize the interest expense of investment loans until the fixed asset is identified and charge it as a period cost afterwords.
If investment loans are in foreign currency, capitalize the foreign exchange gains or lossesuntil fixed asst is identified and charge them as period gains or losses afterwords.
Run simulation scenarios by changing the design parameters. Be prepared the worst scenario where the investment project is halted or completely abondened. Assume a proactive attitude for all risks affecting the capital investment projects.