Financial Evaluation of Investment Projects from the Angle of Ecology

Financial evaluation of investment projects mostly focuses on cash flow, but ecological constraints change the traditional method of evaluation. The paper studies financial evaluation of investment projects from the angle of ecology. Using the method of dynamic discounted analysis, the author adopts four indicators of net present value, rate of net present value, internal rate of return, and the discounted payback period to carry out financial evaluation of investment projects. On the basis of these indicators, adding the effects of ecological constraints on the costs and benefits of investment projects, the paper obtains new indexes for evaluation. Conclusions are as following. Ecological constraints will change the costs and benefits of investment projects. From the angle of ecology, to make correct judgment and choice, financial evaluation of enterprise investment projects should incorporate such changes based on the traditional evaluation system.