Inversión de un Proyecto: Teoría - Depreciación

Understanding Investment in Projects

Overview of Assets

• The presentation aims to clarify the concept of assets, types of assets, depreciation, and investment calculations for projects.

• An asset is defined as a resource owned by a company that can generate benefits, ranging from physical items like computers to rights such as exclusive brand exploitation.

Types of Assets

Fixed Assets

• Fixed assets are long-term resources held by a company for over three years and are not typically acquired through regular business operations. Examples include land, facilities, transportation units, and machinery.

Current Assets

• Current assets are short-term resources used within one year in daily operations. Examples include raw materials and direct labor costs.

Classification of Fixed Assets

• Fixed assets can be tangible (physical items you can touch) or intangible (non-physical items). Not all fixed assets depreciate; for instance, land does not lose value over time.

Understanding Depreciation

Definition and Importance

• Depreciation refers to the loss of value of fixed assets over time due to usage or aging. For example, machinery loses value after several years.

Difference Between Depreciation and Amortization

• While often used interchangeably, depreciation applies to tangible fixed assets while amortization pertains to intangible ones. Examples include software or patents being amortized.

Variables Affecting Depreciation

• Three key variables influence depreciation:

• Investment: The initial cost paid for the asset.

• Depreciation Time: The useful life span of the asset.

• Residual Value: Also known as salvage value; it’s the expected final worth at the end of its useful life.

Benefits of Depreciation for Companies

• Depreciation allows companies to convert investments into expenses on financial statements, leading to potential tax benefits by reducing taxable income.

Distinction Between Investment and Costs

Conceptual Differences

• Investment is associated with expenditures made before a project exists (e.g., medical expenses during pregnancy), while costs arise once the project is operational (e.g., baby supplies).

Practical Implications

• Investments facilitate project initiation; costs ensure ongoing operation and growth. This distinction is crucial for understanding financial management in organizations.

Calculating Straight-Line Depreciation

Example Calculation

• To calculate straight-line depreciation:

• Initial investment: $120,000.

• Useful life: 5 years.

• Salvage value: $0.

• Annual depreciation = (Investment - Salvage Value)/Useful Life = $24,000 per year.

Cash Flow and Depreciation Insights

Understanding Cash Flow and Depreciation

• The cash flow analysis spans five years, with an initial investment of $120,000 depreciating to zero by the end of year five. Each year incurs a depreciation expense of $24,000.

• Depreciation is recorded as an expense, reducing taxable income. This results in lower taxes due to decreased reported profits, even though actual profitability remains unchanged.

• In Peru, depreciation schedules specify asset lifespans: real estate depreciates over 20 years; vehicles and computers over 5 years; machinery over 10 years; while software is amortized as intangible assets.

Types of Investments

Tangible Investments

• Tangible investments involve physical assets acquired at the start of operations. Examples include land, buildings, machinery, office furniture, and vehicles.

• A breakdown of tangible investments includes categories like machinery costs, freight charges, insurance fees, and other related expenses that contribute to total tangible investment.

Intangible Investments

• Intangible investments consist of non-physical assets also acquired during the initial phase. These include company formation costs, patent expenses, startup costs for testing phases, training expenses for staff, and various software purchases.

• An example table illustrates intangible investments with specific monetary values assigned to each category (e.g., incorporation costs totaling 50k soles).

Working Capital Requirements

Definition and Importance

• Working capital encompasses resources necessary for daily operations such as raw materials and labor costs. It is crucial until the business reaches its break-even point.

• The break-even point signifies when a company neither loses nor gains money; it can sustain itself thereafter through operational revenues.

Components of Working Capital

• Essential components include cash reserves for payroll obligations and accounts receivable where credit is extended to clients. Inventory management also plays a critical role in maintaining sufficient working capital.

Investment Breakdown and Project Planning

Overview of Investment Components

• The total investment consists of intangible investments amounting to 600,000 soles and fixed investments, which include tangible assets. The combined total for these is 1,600,000 soles.

• Additionally, working capital is calculated at 500,000 soles. This brings the subtotal of fixed investment and working capital to 3,100,000 soles (or three million one hundred thousand soles).

• It’s crucial to account for unforeseen expenses by adding a margin of 10%. For a total of 3,100,000 soles, this amounts to an additional 310,000 soles.

• Therefore, the overall required investment totals 3,410,000 soles. This figure represents the necessary funds needed at the project's inception for successful execution.

Key Considerations in Investment

• The breakdown includes tangible investments such as machinery and construction costs along with transportation units.

• Intangible investments encompass software requirements for project implementation as well as initial training sessions and necessary permits or patents.

This structured approach ensures that all financial aspects are considered before launching the project.