A new approach on measurement economical performance of capital investment - An empirical analysis

Investment performance must be evaluated using a same method with decision-making method. Although there are many studies about decision-making approaches, there were few studies on the evaluating investment performance. In these processes, two difficulties exist. One is to determine year of investment, another is to determine amount of earning on each year. A few attempts to evaluate investment economical performance. Measuring year of investment and economic performance, have been measured under the assumption of First-In-First-Out (FIFO) approach. Although such attempts have been made for Japanese 1,000 manufactures, only 300 manufactures of the years of investment was successfully measured. In this paper, we have made an alternative attempts based on depreciation, retirement amount and proficiency rate. This study aims at realizing more effective investment performance from the viewpoint of equipment investment. This approach could measure year of investment more accurately than previous studies.