THE ESSENCE AND IMPORTANCE OF ASSESSING THE FINANCIAL AND ECONOMIC EFFICIENCY OF INVESTMENT PROJECTS

Abstract

This article examines the essence, significance, and methodological foundations of evaluating the financial and economic efficiency of investment projects. The study highlights the role of investment project appraisal in ensuring rational allocation of financial resources, reducing investment risks, and enhancing economic growth. Particular attention is paid to the application of modern evaluation methods, including Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), and Payback Period (PP). The research analyzes the differences between financial and economic efficiency assessments and emphasizes their importance in investment decision-making processes. The findings indicate that comprehensive evaluation of investment projects contributes to improving investment attractiveness, increasing competitiveness, and ensuring sustainable economic development.