Investment activity

C

INVESTMENT PROJECT

Investment project is a project connected with real investments (financed from different sources under different terms). Implementa­tion of such projects is conducted through a number of phases and stages which are called project cycle. Each phase or stage has its pur­pose and duration. The following phases are usually known:

1. 
   identification of the project
   
2. 
   preparation of the project
   
3. 
   appraisal of the project
   
4. 
   implementation of the project
   
5. 
   operation of the project
   
6. 
   ex-post evaluation.
   

Many different participants can take part in the investment pro­ject. An investor who can act as a lender is considered the main par­ticipant of the investment project. A customer of the project (project company); advisors (financial, juridical, technical, etc.); supplier of machinery and equipment and other investment goods; a buyer (a customer) of the project product; insurers and others are also partici­pants of the project.

Project activity, especially investment projects are characterized by higher risks in comparison with entrepreneurs hip and other economic activities. It follows from the peculiarities stated below:

• 
  a significant duration of time from the beginning of the project
  implementation until its accomplishing;
  
• 
  a number of participants of the project activity;
  
• 
  a complicated character of the project activity which is pre
  sented as a number of simpler, «elementary» forms of activity (technical, scientific, commercial, constructing, financial, etc.).
  

1. 
   What is an investment project?
   
2. 
   How many phases does an investment project have and what
   are they?
   
3. 
   Who can participate in the investment project?
   
4. 
   What factors can cause high risks in the investment projects?