Investments. The essence of capital construction (the most important)

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Investments. The essence of capital construction (the most important)

Lecture notes, cheat sheets

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ESSENCE OF CAPITAL CONSTRUCTION

Capital construction ensures the expanded reproduction of production capacities and fixed assets for the entire national economy. Together with mechanical engineering, it creates fixed assets for all branches. The result of the construction are structures of various functional purposes. The basis for its implementation are capital investments. They are directed to: new construction, modernization and reproduction of an existing enterprise, technical equipment of the production process, expansion of the facility, etc.

New construction includes the construction of a complex of facilities for the main, ancillary and service purposes of newly created enterprises, branches or individual industries at new sites according to the initially approved project, which, after their commissioning, will be on an independent balance sheet.

Expansion - construction of additional production facilities, separate workshops at an existing enterprise. It includes the construction of new branches and industries, which, after they are put into operation, will be part of an existing enterprise or organization.

Reconstruction of existing enterprises and organizations - full or partial reorganization of existing industries, workshops and other facilities without expanding the main facilities, associated with the improvement of production and raising its technical and economic level in order to increase production capacity.

The main goal of reconstruction and technical re-equipment is to increase the efficiency of production through its technical re-equipment and by increasing output, improving its quality and reducing production costs.

Capital investments are a financial source for the implementation of capital construction.

capital construction - the process of creating production and non-production fixed assets through the construction of new, expansion, reconstruction, technical re-equipment and modernization of existing facilities. With its help, the renovation of physically and morally depreciated fixed assets is being carried out. It covers all stages of the creation of fixed assets, from the design of objects and ending with their commissioning. Its decisive stages are the implementation of a complex of construction and installation works, adjustment and testing of the installed equipment in operation and ensuring the commissioning of facilities under construction.

Capital construction includes design and survey work and research, construction and installation organizations, construction industry enterprises, production of building materials and transport.

Author: Kuznetsova S.A.

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