Cost of the reproduction cycle cancellation

Dept Corporate Finance and Business Valuation Saint-Petersburg State Economic University, 21, Sadovaya sr., St.-Petersburg, Russia

^* Corresponding author: ov27vp8@yandex.ru

Abstract

Capital reproduction is the fundamental basis and main reason of investment. The investment process in a real economy is subject to the impact of risks. This article will help identify some of the risks affecting the capital reproduction process. Sources of uncertainty and risk are investigated throughout the article. In this article we define the importance of borrowed funds for the national economy and associated risks. The impact of risks on the investment cycle can include a loss of capital gains as a minimum. The worst result of risk on the investment process is the cancellation of the project. A frozen or otherwise discontinued capital reproduction cycle may lead not only to a loss, but also requires additional costs, which fall directly on the particular national economy. This article classified costs accompanying the cancellation of the capital reproduction process. The consequences of cancelling the capital reproduction cycle for the investment process in a national economy are revealed.