On the Implementation of Innovative Projects. The Effect of the Investment Leverage

This article presents the construction of mathematical models for estimating the economic conditions in which positive effect is possible for using loan capital, for implementation of investment projects leading to the growth of net present value (NPV). The authors obtained economic and mathematical calculations that allow linking the parameters of innovation and investment projects (the norm of the investor's profitability, the cost of loan capital, the time of its entry into the financial and time frame of the project, the time of the beginning of repayment of the financial obligations, duration of project). These parameters determine the effect of NPV index growth. This effect is related to the favorable conditions for loan capital raising in comparison with financing only by own funds. The authors obtained an analytical expression that determines at which point in time the loan capital should be entered into the financial and time frame of the project implementation, in order for the NPV index to increase its value. Also, the authors found out what should be the cost of the loan capital, so that its attraction would give the effect of an increase in the NPV index. The mathematical relations and the economic conclusions drawn on their basis are backed by practical results, given in a graphic form.