Investment decision-making evaluation indicators refer to quantitative standards and scales used to measure and compare the feasibility of investment projects in order to make program decisions based on them.

From the perspective of financial evaluation, investment decision-making evaluation indicators mainly include static investment payback period, investment rate of return, net present value, net present value rate, profit index, and internal rate of return.

(1) Static investment payback period

The static investment payback period (referred to as the payback period) refers to the entire time required to compensate the original investment with the net operating cash flow of the investment project. It has two forms: "investment payback period including the construction period" and "investment payback period excluding the construction period".

(2) Investment rate of return

Investment rate of return, also known as investment rate of return, refers to the ratio of investment income (after tax) to investment cost.

(3) Net present value

Net present value is the difference between the discounted present value of future cash flows generated by an investment and the project investment cost. The net present value method is a method for evaluating investment options. This method uses the total present value of net cash benefits and net cash investment to calculate the net present value, and then evaluates the investment plan based on the size of the net present value. If the net present value is positive, the investment plan is acceptable; if the net present value is negative, the investment plan is unacceptable. The greater the net present value, the better the investment solution. The net present value method is a relatively scientific and simple method for evaluating investment plans.

(4) Net present value rate

Net present value rate (NPVR) is also called net present value ratio and net present value index. It is the ratio between net present value and investment present value. Ratio represents the net present value of unit investment income. If the net present value rate is small, the return on unit investment will be low; if the net present value rate is large, the return on unit investment will be high.

(5) Profitability index

Refers to the ratio of the present value of the future net cash flow of the investment plan to the present value of the original investment. The present value index method uses the present value index as a method to evaluate the pros and cons of a plan. If the present value index is greater than 1, the plan is feasible, and the larger the present value index, the better the plan.

(6) Internal rate of return

The internal rate of return method is a method that uses the internal rate of return to evaluate the financial benefits of project investment. The so-called internal rate of return is the discount rate when the total present value of capital inflows is equal to the total present value of capital outflows and the net present value is equal to zero. If you do not use a computer, the internal rate of return needs to be calculated using several discount rates until you find the discount rate at which the net present value is equal to zero or close to zero.

Classification of investment decision-making evaluation indicators:

1. According to whether the time value of funds is considered, it can be divided into static evaluation indicators and dynamic evaluation indicators.

2. According to the different nature of the indicators, they can be divided into two categories: positive indicators, the bigger the better, within a certain range, and negative indicators, the smaller the better. Only static payback period is an inverse indicator.

3. According to the importance of indicators in decision-making, they can be divided into primary indicators, secondary indicators and auxiliary indicators.