ECONOMIC ASSESSMENT OF INVESTMENT ON THE BASIS OF PRODUCTION FUNCTIONS

Abstract

The problems of determination of volumes, areas and payback periods of break-even investment in production with the capital-labor ratio optimum of the producer are considered. A new methodological approach to project analysis based on optimal capital-labor ratio based on the most popular production functions (CobbDouglas, CES-function, linear function, Leontief and Allen functions) in economic studies in their classical and dynamical modifications is proposed. This paper is dedicated to the problems of forecasting of volumes, areas and payback periods of break-even investment in industry based on the most popular production functions in economic studies. Further development of the above problems at the level of theory, methodology and practical research will help to improve the investment climate in industry. The proposed methodology is exemplified on the basis of the temporal data of the industry of Ukraine in forecasting volumes and areas of break-even capital investments, payback periods and management of investment projects.