Static Investment Calculation Methods

In this chapter, the reader will deal with static investment calculation methods. The aim is to make the reader aware of the criticism that can be levelled at the static methods and of the risks involved in their application in terms of transferring the results into practice as an investment decision. The general assumptions of the static investment calculation methods are presented, as well as the four most well-known static investment calculation methods, their criteria, their formulas, their risks in detail and their application to practical problems. Also, their quick applicability due to simple data collection and calculation techniques is presented. In detail, the following sub-goals shall be achieved: The working method of statics in general and the assumptions of this investment calculation method group should be learned. The criticism of the static procedures should be worked out extensively. The risks of transferring the calculation results of the static investment calculation procedures as an investment decision into practice should be disclosed and documented very clearly. The reader should be able to assemble the static formulas from a set of relevant calculation elements according to the problem and the relevant static investment calculation method. The cost comparison calculation as a static investment calculation method should be known in detail, defined and criticised as a single method, the possible calculation formulas should be presented and applied to practical cases. The profit comparison calculation as a static investment calculation method should be known in detail, defined and criticised as a single method, the possible calculation formulas should be presented and applied to practical cases, the profitability calculation as a static investment calculation method should be known in detail, defined and criticised as a single method, the possible calculation formulas should be presented and applied to practical cases. The profitability calculation as a static investment calculation method should be known in detail, defined and criticised as a single method, the possible calculation formulas should be presented and applied to practical cases. The static amortisation calculation as a static investment calculation method should be known in detail, defined and criticised as a single method, the possible calculation formulas should be presented and applied to practical cases and. All procedures should be applied to a practical problem in a case study. After reading the chapter, the reader should be able to define what static investment calculation methods are, what value they have for practical application, what criticisms and dangers there are in transferring the calculation results into practice and how the methods work in detail. The reader should be able to set up the corresponding formulas independently after reading the chapter. In order to be able to achieve these goals, it is necessary to follow the offered exercise calculations independently doing the mental calculation, with the pocket calculator or with the spreadsheet. Enjoy your work!