11 and 12 denote the corresponding capital volumes for the first and the second variants; Investment investment Cl and C2 denote prime cost of equal output of produce for the first and the second variants. This produces the Inequality (C2 + En.l2) < (C1 + En.ll>. The left and the right parts of.the inequality represent nothing else but annual reduced costs of the variants compared. As the left part of the lnequal lty is less than the right part the second variant of capital investment is more economical than the first one, and vice versa. Thus, the most economical always will be a yar!,ani which Is characterized by the smallest value of annual reduced costs. This is true for any number of compared variants. It Is not difficult to calculate the effect of using the most economical variant. It equals CC1 + En.lll- CC2 + En.l2) which. when transformed, give C-En.l. Thus. the effect represents above normative saving or, as we have already noted, general saving (profit) reduced by Its normative value which equals En.l. In our example the reduced costs for the first variant wll I be 4.44 million roubles (4.2 + 0.12 x2) and 4.08 million roubles (3.6 + 0.12 x 4) for the second variant. The economic effect of the second more economical variai"t wi II be equal 0.36 mi Ilion roubles (4.44 -4.08). o "' <0 C\1 408 It Is necessary to point out that In project preparation practice the choice of the best va~lant of capital Investment and new technology, especi~l Jy •hen their number exceeded two.· has beEn en iJ,t· bo!:>is of rrlnlmum· annual reduc~:>d costs and not minimum estimated payoff period. This Is explained by slmpller calculation procedure. Morever. very often the calculation of 
**Analysis**
The text discusses the comparison of two variants of capital investment, evaluating their economic efficiency based on annual reduced costs. The calculation of the effect of using the most economical variant is also presented. This suggests that the text is related to economic decision-making and investment strategies.

**Category**
Industry, Economics