In order to assess the feasibility of implementing any investment (when investments are made first, and then their return), it is always necessary to calculate their effectiveness, i.e. their economic indicators such as net discounted income, payback, internal rate of return and the return on investment index (profitability index).
So, all these calculations are based on a certain period of time, which is the calculation horizon. In one period, something (investments/income) comes or goes more, in another less, etc., until the completion of the project, within the entire calculation horizon.
That is, the criteria for evaluating the effectivenessof an investment project always include a comprehensive and objective analysis that takes into account the whole range of factors (investments, costs, profits, net income) his work in during the entire service life, and not for a single period.
That's why the investment assessment of the project is integral, because its calculation includes exactly the cumulative effect for the entire period of the investments.
Upon the implementation of the project, its effectiveness can be fully assessed only after its completion (100% wear), calculating the same integral indicators for the entire actual period of its operation.
As the project is actually implemented, it is possible to judge only its current dynamics - the pace of compliance of planned indicators with actual ones, including integral ones, but already taking into account the planned assessment of the remaining period of the project.
