Project Investment is the total amount of monetary (funds) and non-monetary (property) resources that the investor wishes to provide to a project in order to gain some benefit or return upon successful project completion. The investor acts as the project sponsor or champion who evaluates the investment opportunity to determine ROI (Return on Investment) which is a key measure of the project’s performance.
Necessary investments into a project are made if this project appears to be feasible and economically effective. The project manager needs to carry out feasibility study to justify the project, estimate financial resources necessary for project implementation, and approve the project’s fitness to business goals and objectives. This person develops a project proposal document and submits it to the sponsor for review and approval. If the sponsor accepts the project, the necessary amount of investment is to be provided to the project.
A cost projection document is usually used to define and estimate investment resources required to a project. Such a document includes the following components:
- General description: Project Name, Description of Business Idea and Product, Key Parameters (forecasts, marketing goals, development expenses, performance expectations etc.)
- Organizational characteristics: Legal Form, Type of Financing, Capital and Current Expenses.
- Financial figures: Total Investment Volume, Pay-off Period, Profitability, ROI.