What is investment cost

Investment costs are the total costs associated with the implementation of business projects. Their types and composition vary depending on the specific project.

Types of investments

Investment expenses are the sum of all expenses of the company aimed at its normal functioning. The amount of investment costs proportionally affects the level of profitability of the project. Accordingly, the lower the cost, the greater the income.

In general terms, from the point of view of types of costs, real (capital-forming) and financial investments are distinguished.

The objects of real investment can be fixed assets, real estate, stocks, assets, R&D, investments in personnel (training and advanced training). It is important to note that investments in improving the professional level of employees and new developments can be attributed to investments only when implementing investment projects.

Capital investments can be directed to new construction, as well as expansion, reconstruction or re-equipment of enterprises.

The objects of financial investments can be securities (stocks, bonds, etc.), deposits, foreign currency, precious metals, etc.

Distinguish between gross and private investment costs. Gross - this is the volume of real investment for a certain period. These costs are carried out at the expense of own funds (depreciation, profit), attracted (from the issue of shares) or borrowed funds (loans and bonds). Net investments, unlike gross investments, are reduced by the amount of depreciation.