FINANCE

THE BEST INVESTMENT ALTERNATIVE

PRESENTADO POR

MAGDA JULIETH FERNANDEZ MACIAS

KAREN HERNANDEZ MERCHAN
STEFANY ORTIZ GARCIA
JUAN DAVID RIVAS

PRESENTADO A

JARIRO LARA PRADA

CORPORACIÓN UNIVERSITARIA DEL HUILA, CORHUILA

PROGRAMA DE INGENIERÍA INDUSTRIAL
FACULTAD DE INGENIERÍA
NEIVA, HUILA
2018-1
THE BEST INVESTMENT ALTERNATIVE.

For starters, with ideas of how to invest, how the basic concepts, know what is an
investment, then, we have, according to José Tarragó Sabaté, the investment
consists of the application of financial resources to the creation, renewal and
expansion or improvement of the operational capacity of the company, and
according to Peumans, it is about the investment is all that can be purchased with
financial instruments for the acquisition of specific goods or production instruments,
called capital goods and that the company uses in several years to fulfill its objective.

The definitions are summarized in one idea and that investments consist of a
process for which an element decides to link liquid resources, a change in liquid
expectations, a prolonged life time, your project's time horizon.

It should be taken into account that four different but similar variables have yet to be
considered

1. The expected return, that is, the return that is obtained by our investment, and can
be as the percentage of the amount invested. Here we must contemplate that there
is a direct relationship between the expected return and the risk assumed: a higher
yield, greater risk.

2. The accepted risk, that is, the uncertainty about the performance and the
possibility that the money invested will not be recovered. This is a very subjective
variable that defines the profile of the investor, and the aversion to risk that shows.

3. Another variable is the time horizon of the investment, which can be short, medium
and long term. Longer term investments tend to offer higher interest rates than lower
ones.

4. Finally, one last point that we should contemplate is the liquidity of our investment;
that is, how quickly we can recover our investment and at what cost if we need
recovery.
OBJECT OF THE INVESTMENT ANALYSIS.

Having already a definition of what the investment is, we start now with the analysis
as such, stating that the investment analysis is basically reflected in two questions,
the first, where you have an investment project and you must decide if this is
convenient or not to undertake it, and second, that having two or more projects,
advisable, it is necessary to determine their preference from a financial point of view.

For this, there are some criteria with which the analysis is related.

1. That the updated value of the yield is higher than the current value of the
investment cost. That is, they have V.A.N. positive, and within that condition, give
preference to investments that comply with the other objectives set by the company,
present a V.A.N. higher in relation to the capital invested. (Relative current net
value).

2. That the company can "withstand" the financial stress that is going to occur
between the moment or moments of making the investment (or the payments of the
same), and the moment or moments in which the fruits of said investment are
collected; that is, its positive cash flows.

If the first condition is then met and the discount rate is correctly fixed, it will be
evident that the volume of collections is greater than the volume of payments,
although there will generally be a time lag, which the company must be in a hurry
and be in good condition. to be able to support and finance.

METHODS OF INVESTMENT ANALYSIS.

There are several methods or models of investment valuation. They are thus divided
between static methods and dynamic methods.

1. STATIC METHODS:

• METHOD OF NET CASH FLOW OR STATIC CASH FLOW: It is the sum of all
collections minus all payments made during the useful life of the investment project.
It is considered as the simplest method of all, and of little practical utility.
Net cash flow per committed unit, formulates:

𝐹𝑙𝑢𝑗𝑜 𝑁𝑒𝑡𝑜 𝑑𝑒 𝐶𝑎𝑗𝑎

𝐼𝑛𝑣𝑒𝑟𝑠𝑖ó𝑛 𝐼𝑛𝑖𝑐𝑖𝑎𝑙

• PAY-BACK METHOD OR RECOVERY PERIOD: It is the number of years that the

company takes to recover the investment. This method selects those projects whose
benefits allow the investment to recover more quickly, that is, the shorter the period
of recovery of the investment, the better the project will be.

• METHOD OF ACCOUNTING RATE OF RETURN: this method is based on the

Cash-Flow concept, instead of collections and payments and its main advantage is
that it allows calculations more quickly by not having to prepare statements of
collections and payments.

𝐵𝑒𝑛𝑒𝑓𝑖𝑐𝑖𝑜𝑠 + 𝐴𝑚𝑜𝑟𝑡𝑖𝑧𝑎𝑐𝑖𝑜𝑛𝑒𝑠
( )
𝐴ñ𝑜𝑠 𝑑𝑒 𝐷𝑢𝑟𝑎𝑐𝑖ó𝑛 𝑑𝑒𝑙 𝑃𝑟𝑜𝑦𝑒𝑐𝑡𝑜
𝐼𝑛𝑣𝑒𝑟𝑠𝑖ó𝑛 𝐼𝑛𝑖𝑐𝑖𝑎𝑙 𝑑𝑒𝑙 𝑃𝑟𝑜𝑦𝑒𝑐𝑡𝑜

2. DYNAMIC METHODS.

• Dynamic or discounted Pay-Back: It is the period of time or number of damages

that an investment needs so that the updated value of the net cash flows equals the
capital invested.

• The net present value (V.A.N): It is understood as the sum of the updated values
of all the net cash flows expected from the project, minus the value of the initial
investment. If an investment project has a positive NPV, the project is profitable.
Between two or more projects, the most profitable is the one with the highest NPV.
A void NPV means that the profitability of the project is the same as placing the funds
invested in it in the market with an interest equivalent to the discount rate used. The
only difficulty to find the NPV is to fix the value for the interest rate, existing different
alternatives.
The NPV can also be expressed as an index of profitability, called the relative current
net value

𝑉. 𝐴. 𝑉 𝑑𝑒 𝑙𝑎 𝐼𝑛𝑣𝑒𝑟𝑠𝑖ó𝑛
𝐼𝑛𝑣𝑒𝑟𝑠𝑖ó𝑛
O en tasa porcentaje :
𝑉:𝐴:𝑁 𝑑𝑒 𝑙𝑎 𝑖𝑛𝑣𝑒𝑟𝑠𝑖ó𝑛 ×100
𝐼𝑛𝑣𝑒𝑟𝑠𝑖ó𝑛

• Internal Profitability Rate (T.I.R) It is the indicator of relative profitability of the

project, so when a comparison of internal rates of profitability of two projects is made,
it does not take into account the possible difference in the dimensions of the same.
A great investment with a T.I.R. low may have a V.A.N. superior to a project with a
small investment with a T.I.R. elevated

Taking into account the aspects mentioned above, and taking as reference the
mentioned by Peumans where he mentions that it is common to observe that there
are companies that despite not having satisfactory results overcome periods of crisis
with ease, while others with very high returns, going through critical periods are
forced to stop or end their activity. 'The reason for this difference lies exclusively in
the balance or imbalance of its financial structure. Hence the importance of
establishing a rational investment plan and the need to carry out a detailed study of
the financial structure of the company or investment.

WHAT TO INVEST 650,000,000

From the idea of investment, taking into account that no investment you want to
make is completely safe, despite the fact that one does not grant control of the
situation at its maximum level.

However, highly viable alternatives have emerged to make investments in Colombia,

where we find that the main one is to invest in the stock market, the second
investment option, with a somewhat lower risk than in the previous one is to invest
in agriculture and livestock, since it is said that it also has high possibilities of
important future returns; On the other hand, as a third option, Colombia presents a
high movement in real estate according to the high strata, however for its sector, this
is limited at the moment of seeing it as a fruitful alternative; Finally, there is the option
of a CDT, but this is taken as an alternative to slightly more conservative investors
because they are limited to avoiding risks and the loss of value of their money over
time.

Investigating markets in Colombia, and looking for a competitive interest rate in the
market, of the $ 650,000,000, $ 200,000,000 will be invested in stocks, both national
and international. 'National shares were valued in 2017 by 7%, and internationally,'
China would advance by 6.4% The United States, main partner of the entire
continent, would advance 3.3% and Europe, in particular the Euro Zone, 2 ,1%. Latin
America, meanwhile, would grow 2.4%, so 30% will go to international stocks, 20%
in international fixed income, 20% in local shares, 20% in local fixed income and
10% in other investments as farm root.

It is proposed as an alternative with capital to invest $ 150,000,000; in the most

productive way possible so that this capital is invested and can significantly increase
our assets, this consists of taking this amount of capital and assigning it to create
our own company, since as industrial engineers we are able to take the best
decisions in our professional life, then if we invest this amount in creating our own
company. A company related to real estate civil works, as we know that civil works
in Colombia are increasing and as time passes in the country we will find boom in
construction and infrastructure and thus giving a proper management and
management we will create a productive and recognized company and in this way
the amount invested is going to multiply, does not mean that this will happen
immediately, because it takes a process. But if good management is done and clear
goals are projected, in the medium term this investment will be reflected in my assets
and business and personal success.
Evaluating other investment alternatives, it was found that the assets of classic
automobiles present great performance in their profitability, "Only during the year
2017, its value has increased by 39%. Then based on the little movement of this type
of vehicles in Colombia, the market will present a greater offer, where $ 200,000,000
will be invested in the acquisition, improvement and sale of different models of
common vehicles both in Colombia and abroad.

Assessing other investment alternatives at the national level, it is necessary to

review or see the movement of several lakes, dams in the country, for the creation
of tourism, where $ 50,000,000 will be invested by leasing an area in the Betania
dam that has vehicular access and be able to ride different extreme sports, this
would support the region to grow and give work seeing that this would be very
feasible to develop and execute since it could be managed progressively.

For the end, there would be $ 50,000,000, which, by relating them to the different
alternatives and taking a somewhat conservative attitude, will be deposited in a CDT,
evaluating risk of stock losses or loss of money.
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LEON, M. T. (s.f.). PORTAFOLIO. Recuperado el MAYO de 2018, de

http://www.portafolio.co/tendencias/opciones-para-invertir-mi-dinero-499773

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https://www.zonaeconomica.com/inversion/definicion