An integrated investment and financial planning model

In countries where investment incentives and tax exemptions are offered, directing investments into high priority sectors and areas, evaluation of investment alternatives and methods of financing them necessitates an integrated approach. This paper presents an integrated investment and financial planning model developed for a Turkish company where the objective is maximization of after tax cash flows. Experiments conducted with the model demonstrate that initial financial structure and financial ratio restrictions are determinant on the solution, and that decisions based on investment incentive and tax exemption schemes only may not be optimal. Another group of experiments demonstrate the use of the model as a strategic planning tool to investigate the sensitivity of decisions to parameter values and areas where further data analysis and marketing research would be helpful.