Evaluation Of Enterprise Investment Project Efficiency Based On NPV, IRR And PI Indicators

Abstract

This paper provides an in-depth analysis of the theoretical foundations and practical applications of evaluating enterprise investment project efficiency using Net Present Value (NPV), Internal Rate of Return (IRR), and the Profitability Index (PI). The study examines the role of discounting techniques, the time value of capital, and the relationship between risk and profitability in investment decision-making. Furthermore, it develops a corporate-level cash flow model for calculating NPV, IRR, and PI and proposes a comparative analytical framework for selecting the most efficient investment alternative. The findings substantiate the importance of adopting internationally recognised methodologies for assessing investment efficiency and expand the potential for their application in decision-making processes within banking and financial institutions.