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The evaluation of investment projects has been carried out mainly through the analysis of Discounted Cash Flow (DCF), whose financial feasibility measures have been based fundamentally on approaches such as the Net Present Value (NPV) and the Internal Rate of Return (IRR), which are widely discussed in the field of energy project valuation. Despite this, the classical methods have a limitation when perceiving relevant characteristics for decision-making in high-risk investments, such as the uncertainty of the cash flows and the quantification of risk. An alternative to the use of these methods is the technique known as Decoupled Net Present Value (DNPV), which decouples the risk associated with the project from the value of money over time. This valuation methodology was applied to a photovoltaic solar energy self-generation project in Colombia. In this study, the results obtained through the DNPV was equivalent to 2.3-fold the value obtained by means of NPV. Thus, many renewable energy projects can become undervalued since traditional methods mistakenly associated a discount rate that includes a very high risk premium and that in many occasions it is more related to the sources of financing of the project instead of representing the risk component that it has.Keywords: Decoupled net present value (DNPV), Renewable energy projects, Solar energy investmentsJEL Classifications: Q2, Q4DOI: https://doi.org/10.32479/ijeep.10577

The aim of the paper is to develop a methodology for evaluating oil and gas fields return on investments based on not only finance, but also environmental and social interrelations. The subject of the study is a comparison of methods for calculating return on investments on the example of China, Canada and Russia’s oil and gas companies. The authors used a comparative method of calculations, as well as a case study — a comparison of return on investments methods on the example of oil and gas enterprises. In the paper, the authors analyze the next traditional methods of economic assessment: net present value, differential rent, reserve and multiple costs. The authors suggest using a new assessment method that determines the energy return on investment (EROI). This method does not rely on traditional analysis of net present value (NPV), internal rate of return (IRR), and financial sensitivity. It comprehensively takes into account the costs of energy production, environmental protection and energy efficiency. Based on the results of the study, the authors conclude that the advantages of various methods of economic assessment should be integrated in order to avoid disadvantages and create a new dynamic integrated system of economic assessment. Oil and gas companies may use the results of the study to implement the energy return on investment methodology concerning oil and gas fields’ evaluation. A promising direction for further research may be to compare the energy return on investment at oil and gas enterprises in different countries as well as developing corporate reporting concerning energy return on investment improving efficiency.

The paper present an economic model and framework for the development of natural gas pipeline for sustainable economic development in Nigeria. The study reviewed the economics of natural gas pipeline development in Nigeria. The research formulated an economic model for a case study of Calabar to Ajaokuta 417km gas pipeline project and a discounted cash flow for an economic life of 40 years. The project economics indicates a Net Present Value (NPV) of 12.5 billion USD with a discounted payback period of 7 years and 9 nine months, Profitability Index (PI) of 7.30, Internal Rate of Return of 23.05% and Growth Rate of Return 26.97% and these project economic indicator shows that the gas pipeline investment is viable. This study provides an economic model that would guarantee security of gas supply, provide access to clean energy and provides an economic framework to support long term natural gas pipeline development in Nigeria

Evaluation of investment efficiency is central to the process of justifying and selecting possible options for investing in investment projects, and is therefore a key to successful implementation of investment activities of agricultural enterprises. The main directions of financing of investment projects of agricultural enterprises are: purchase or construction of unfinished construction objects, new construction, expansion of existing enterprises, reconstruction of existing enterprises and technical re-equipment of existing enterprises. Two main groups of methods of assessing the cost-effectiveness of investment projects have become most widespread: static and dynamic. Static methods involve the calculation of indicators based on undiscounted cash flows. Dynamic methods, on the contrary, take into account the change in the value of money over time and imply bringing the values of all cash flows to the same period by discounting or compounding. Dynamic methods for assessing the effectiveness of investment projects include the following basic methods that rely on most modern Ukrainian enterprises, such as net present value cash flow (NPV), internal rate of return (IRR), payback period (DPP) and project profitability index (PI). On their basis the basic methods of selection of investment projects of agricultural enterprises are formed. Net Present Value (NPV) calculation. is based on comparing what will be invested in the future with what is invested now. The Profitabale Index (PI) is directly related to net present value and is defined as the ratio of the discounted cash flow to initial investment. The IRR (Internal Rate of Return) is the discount rate at which the projected cash inflows are equal to the project's discounted cash flows. As indicators of the effect in calculating the overall efficiency of investments, it is advisable to use changes in the following values of growth: revenue from the sale of enterprise products; gross income; profit before tax; net profit; cash flow; clean products. Gross and net investment should be included in the costs. The use of qualitative methods in investment analysis is due to the following reasons: the subjectivity of the phenomena or characteristics studied; lack or lack of necessary information; inability to analyze objective and acceptable methods; lack of research object (to be created during project implementation). Quantitative methods for evaluating agricultural investment projects include methods of probability theory and mathematical statistics, as well as economic and statistical methods.

In this Study, the evolution and history of petroleum contracts is discussed with a focus on the recent major shift witnessed from Joint Operating Agreements (JOA) and Concession contracts to Production Sharing Agreements (PSA) due to the increase in the complexity of operations and funding difficulties especially from the government’s side. In addition to that, the fiscal system of PSA’s is studied as a legal instrument to allocate risk between the parties, identify ownership of assets, commitments and operational control. This study aims to figure out the application of economic evaluation for PSA’s using Discounted Cash Flow Analysis (DCF) which is considered to be powerful in evaluating the investment performance by calculating Net Present Value (NPV) of cash flows and the Internal Rate of Return (IRR). The estimated production profile submitted in the PSA of interest was exaggerated. When a Monte-Carlo Simulation was run the riskier profile (P10) was the closest to the PSA production forecast. However, in such agreements usually the mid case scenario (P50) is taken into consideration. The NPV for the first 10 years in this project is around $0.45 Billion compared to the total NPV calculated using the economic model $1.26 Billion. However, the recent instability of the oil price in the last 10 years what causes this project in particular not to meet the target so far. The IRR calculated for the 10 years period is almost the hurdle rate 10% and this is again due to the unexpected NPV due to the oil price. To reduce the uncertainty, pilot projects needs to be conducted in the first year in smaller spacing to allow for the response to be detected faster and then develop a Field Development Plan (FDP).Keywords: Petroleum production sharing contracts; Economic evaluation; Decision-making modeling; Middle East.JEL Classifications: E23, K12, Q4DOI: https://doi.org/10.32479/ijeep.7810

Recent fundamental work with discounted cash flow methods shows that an alternative metric for evaluating profitability and risk, one different from Internal Rate of Return (IRR) —namely the annualized and non-dimensionalized Net Present Value (NPV%)— can make evaluating project profitability easier yet more informative. It provides a simple and transparent strategy to optimize a design's key financial dependent variables (capital investment, profitability, risk). 1 Both traditional and exo-parametric modeling methods developed by the author are linked to this metric, providing an efficient and precise mechanism to organize and carry out the financial/optimization search procedures in process design. Design engineers want to know what is the optimum size of investment (TI) that meets projected market conditions? What is the expected long-term (NPV) return? What metric can be used to maximize them, consistent with the need to recover capital as quickly as reasonably possible (i.e., to bound the “short-term risk”)? The proposed approach answers all three questions simultaneously, with a precise min-max solution obtained transparently.

Electronic toll collection (ETC) plays, as part of transport demand management (TDM) measures, an important role in preventing traffic congestion and improving the environmental conditions in urban and rural areas. An attempt is made in the framework of this paper to evaluate the overall performance of a toll station when a lane is dedicated to ETC. The case study refers to a toll station in the Thessaloniki Metropolitan Area, Greece. Scenarios considered specific traffic characteristics, variable toll booth setups, and different penetration rates of the ETC tag users for car and heavy vehicles. The tool used in the evaluation process was the PTV Vissim traffic simulation software. The operation of the toll station during a specific peak-hour period was simulated with the aid of the specific software. In total, 39 alternative scenarios were developed and compared to determine the level of penetration rate for which the ETC lane would be effective for different toll booth setups. Results showed that when the right lane of the toll station is converted to ETC lane, the penetration rate of this lane must be greater the 15% for the private vehicles and 20% for the heavy goods vehicles (HGV) to reduce traffic congestion and to improve environmental conditions. It was also found that when an additional ETC lane was introduced to the existing toll station set up, traffic congestion and the associated environmental conditions were much improved even for low penetration rates. It must be noticed that the results from the use of discounted cash flow methods like internal rate of return (IRR), net present value (NPV) and benefit&ndash, cost ratio (BCR) showed that all economic indicators converge as penetration rate increases in all toll booth setups. Therefore, there is a specific penetration rate threshold above which the economic viability of the investment is secured. These findings can assist the design of an effective policy in terms of the optimized operation of a toll station and sustainable mobility planning.

Micro Gas Turbines (mGTs) appear as a promising technology for small-scale (up to 500 kW) Combined Heat and Power (CHP) production. However, their rather low electrical efficiency limits their profitability when the heat demand is low. Hot liquid water injection in mGTs—by means of a saturation tower within the micro Humid Air Turbine (mHAT) cycle—allows both improving the flexibility of heat production and the electrical efficiency of mGTs; two qualities that if enhanced would result in an increased economic feasibility of the technology. Based on simulations performed on a Turbec T100 mGT converted into an mHAT, this paper presents an assessment of the economic profitability of both an mGT (working as a CHP) and an mHAT unit operated in real network conditions. To that end, we have used net present value, internal rate of return and discounted cash flow stream methodologies. The input to the study consists of (1) hourly heat and electricity demand profiles of two distinctive users, one located in Brussels the other in San Francisco and (2) 25 electricity and natural gas price scenarios. Our aim is to investigate whether the increase in flexibility and electrical efficiency achieved when transforming an mGT into an mHAT offsets the additional costs. Results show that in scenarios with high electricity and low natural gas prices—the relationship between these two variables depending on the user, CHP and mHAT units are economically competitive. For all the price combinations where investing in mGT technology is feasible, it is worth transforming the unit into an mHAT. Moreover, the lower the electricity demand with respect to the nominal T100 production (100 kWe), the more sensitive the user is to the price at which electricity is sold to the grid and therefore, the more the feasibility of mGT and mHAT technologies depends on subsidies or primes on surplus-electricity production.

Фінансове становище підприємства допомагає визначити конкурентоспроможність і потенціал в діловому співробітництві, є гарантом ефективної реалізації економічних інтересів всіх учасників діяльності як самого підприємства, так і його партнерів. В результаті аналізу виявлені вразливі місця, що потребують особливої уваги. Нерідко виявляється достатнім виявити ці місця, щоб розробити заходи щодо їх ліквідації. Була запропонована інвестиційна програма щодо підвищення ефективності діяльності комунального підприємства "Теплопостачання та водо-каналізаційне господарство" м. Южноукраїнськ Миколаївської області. Evaluations of the company's performance are carried out with the help of certain quantitative characteristics, which reflect the results of the enterprise and the company's expenses for the purposes of the activity, as well as some qualitative characteristics. The analysis of technical and economic indicators showed some deterioration of the results of the economic activity of the municipal enterprise "Heat supply and water and sewerage economy", which occurred mainly due to: the increase in the cost price of commodity products in connection with the increase in energy prices, losses in domestic networks, increase wage and salary costs, reduction of sales volumes in the tariff, unallocated volumes of heat and electricity, overheating in the heating of multi-apartment houses in the grid losses in excess of the lack of cover Shara insulation, and are not included in the tariff costs of thermal energy public places because of imperfect legislation. An investment program was proposed for improving the efficiency of the municipal enterprise "Heat supply and water-drainage economy" in uzhnoukrainsk, Mykolaiv region. From the point of view of the theory of time value of money, the main indicators of calculating the efficiency of investments are: net present value (NPV), internal rate of return (IRR), profitability index (PI) and payback period (PP). Analyzing the result, it is worth noting that the project can be considered pay-back and economically attractive.

Made available in DSpace on 2019-10-05T09:06:59Z (GMT). No. of bitstreams: 0 Previous issue date: 2018-01-29 Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP) The increasing demand for food and the need to reduce the environmental impacts of agricultural production in the face of population growth make conservation practices a valuable alternative to increase the sustainability of agriculture. The adoption of these practices, important for food production in emerging economies, increases the feasibility of production on small and intermediate farms in ways that improve social equity. The purpose of this study was to compare the economic feasibility of a no-till soybean monoculture and a no-till soybean/corn (on/off-season) rotation in Brazil. Unlike other studies, a discounted cash flow was combined with a direct cost system, in order to compare the results for farms of different sizes. The results indicate that the larger the farm is, the greater the optimization of production and fixed cost reduction for a set of investments in fixed assets. Although the net present value and internal rate of return were found to be negative for all treatments due to the need for high investment, areas of 60 and 90 hectares generated positive operational cash flow, representing positive profitability for small and intermediate-sized farms. The break-even point was over 100 ha, and the return on investment for 90 ha farms was 11.9% per year. Univ Estadual Paulista, Soil Sci Dept, Joboticabal, Brazil Univ Estadual Paulista, Econ Adm & Educ, Joboticabal, Brazil Univ Estadual Paulista, Soil Sci Dept, Joboticabal, Brazil Univ Estadual Paulista, Econ Adm & Educ, Joboticabal, Brazil FAPESP: 2000/13948-2 FAPESP: 2005/55500-1

In response to the pressing global challenges of climate change, community based management of miombo woodlands in Tanzania is promoted for carbon credit project development. However, evidence on its feasibility is scanty and questionable. This study examined the economic feasibility of carbon credit project development in community based forest management (CBFM) using four similar miombo woodlands from Southern highlands. The analysis was based on 144 sample plots from managed woodlands and 100 plots from business as usual (BAU) (open access). Allometric equation was applied to convert biomass to carbon per hectare. Improved carbon stock was determined and its economic value ascertained based on global voluntary carbon markets. Project feasibility analysis was performed using discounted cash flow, internal rate of return, and benefits/costs methods. Annual opportunity cost and variable costs were subtracted from total revenue to obtain annual net profit. The annual rate of return on investment was calculated by dividing profits by total costs. It was revealed that carbon stock improved significantly in CBFM compared to BAU (P<5%). The improvement had positive net present value and benefit-cost ratio of 1.83. Moreover, sensitivity analysis showed that if any unexpected situation occurs, the project will still be of worthiness. The findings are useful to enrich the debate on carbon credit development under community based management of miombo woodlands in Tanzania.

10 páginas..-- 5 figuras.-- 3 tablas.--61 referencias, Hedgerow orchards with high plant densities, or super high-density (SHD) orchards, are considered to be amongst the most profitable management systems for most fruit-tree species. Regulated deficit irrigation (RDI) strategies are recommended for SHD olive orchards, especially when scheduled from automatic and continuous measurements of plant water stress. There is a lack of information, however, on the profitability of this approach. In this work we analysed the financial feasibility of using three different systems for monitoring water stress in an ‘Arbequina’ SHD olive orchard under a RDI strategy recommended for the experimental area (SW Spain). The systems were based on sap flow (SF), trunk diameter variation (TDV) and leaf turgor pressure (TP) related measurements. We first compared their equivalent annual cost (EAC), resulting the TP based technology as that with the greatest potential to be adopted by farmers. We then used Discounted Cash Flow Analysis (DCFA) to compare the financial feasibility of an RDI treatment scheduled from TP related measurements and providing 45% of the crop water needs (45RDITP) with both a similar treatment but scheduled with the crop coefficient approach (45RDICC) and a fully irrigated (FI) treatment. Our results from two irrigation seasons demonstrated that the 45RDI strategy guarantees the profitability of SHD olive orchards in the long-term, with both 45RDICC and 45RDITP showing positive Net Present Value and Internal Rate of Return above the interest on capital. All the financial indicators suggested higher financial performance of 45RDITP as compared to 45RDICC, but differences were not significant, likely because of the high variability among replicates. The financial impact of Common Agricultural Policy payments as well as varying olive oil and irrigation water prices on the irrigation treatments was discussed., This work was funded by the Spanish Ministry of Economy and Competitiveness (research project AGL2012-34544), by the Junta de Andalucía (research project AGR-6456-2010) and by the FEDER programme. Antonio Montero helped us with the field and laboratory work. Thanks to the owners of Internacional Olivarera, S.A.U. (Interoliva)

Conceptual design of a new plant involves the evaluation of alternative plant configurations to determine physical feasibility (does each achieve desired production levels within the required quality limits?) and economic viability (is sufficient profit generated each year of a multiyear projected lifetime while requiring an acceptably low initial capital investment?). In testing alternatives, designers require both an absolute measure and a normalized measure in order to make a definitive evaluation. In recent years NPV (Net Present Value) has often been chosen as the absolute metric and IRR (Internal Rate of Return) as the normalized one. But these two measures provide insufficient information to develop an optimum design that can be guaranteed suitably profitable, i.e., with optimum design profits high enough to justify investment … more importantly, high enough to warrant taking on the risk/uncertainty characteristics of a particular product/plant with the business environment in which the constructed plant must operate. In this paper a relook at discounted cash flow procedures motivates a new metric based on a normalized and annualized value of NPV, designated NPV%. In line with traditional analysis, a required minimum value – N P V % r e q u i r e d (%/year) – once found via ad hoc and/or first principles methods, is assumed to represent suitably the Enterprise's profitability expectations plus the “premium” needed to justify intrinsic business risk/uncertainty. The ability to achieve a value that justifies anticipated risk, however that property is calculated or characterized, is a major element in determining whether projected returns from a particular design are high enough to justify proceeding with the project. Surprisingly, a close analysis of spreadsheet methodology used for discounted cash flow calculations, such as in calculating NPV, reveals unexpected underlying linearities, e.g., N P V = a ( Profi t B T ) + b ( Fixed Capital ) when “factored estimates” are used (usually the case at the conceptual design stage), as well as R O I B T = e ( N P V % ) + f Thus maximizing either ROIBT or NPV% is equivalent to minimizing the time to achieve return of invested capital (exposure to risk). NPV measures the effect on a company's balance sheet that will result from a decision to design/construct/operate. Thus once an appropriate risk premium for a plant is agreed upon, a rigorous design procedure can utilize a constrained optimization procedure in which NPV (absolute profitability) and NPV% (inverse of time exposed to the risk of capital loss) are jointly optimized, subject to the constraint N P V % > N P V % r e q u i r e d . How much to weight the long-term profitability vs. speed of capital return is essentially a decision for the designers/investors.

The construction of Jakarta MRT Phase I has been carried out by using funds from foreign debt. Meanwhile, Jakarta MRT Phase II or other local infrastructure projects are still waiting for new funding scheme. One alternative is municipal bonds. This study investigate the possibilities of using municipal bonds to finance urban infrastructure project with the case study of Jakarta MRTPhase I. The analyzed use three perspectives including financial aspect, legal aspect, and Jakarta financial capacity aspect. financial analysis using discounted cash flow (DCF), net present value (NPV) and internal rate of return (IRR).Secondly, study literature is used in the legal analysis by exploring specific regulations regarding the municipal bonds. Finally, the Jakarta Regional Budget and Jakarta Budget Audit Report is examined to get insight and depth information regarding its financial capacity. The result is municipal bonds are feasible as the source of financing Jakarta MRT Project.

This paper reviews the capital budgeting survey literature in South Africa over the period 1972 to 2008. The survey evidence indicates a significant growth in Discounted Cash Flow (DCF) methods and a fall in the use of other methods. In particular, there has been growth in the use of Net Present Value (NPV). Yet, the Internal Rate of Return (IRR) technique remains the primary method used in practice despite some serious drawbacks. Larger companies are more likely to use DCF methods. There has been a significant growth in the use of sensitivity analysis and scenario analysis. However, there is little use of sophisticated risk analysis tools such as Monte Carlo simulation, and decision trees. Although financial theory predicates the use of risk adjusted discount rates, surveys indicate that the majority of companies use a single firm discount rate. Companies have increasingly used inflation-adjusted cash flows but the process of ranking mutually exclusive projects is not aligned with finance theory. There is limited use of the Modified Internal Rate of Return (MIRR) method and DCF dominant companies do not outperform non-DCF dominant companies. The most important phase of project evaluation is the project definition and cash flow estimation phase and yet research studies have focused mainly on the financial analysis and project selection phase.

This study analyzes the economic viability of peanut cultivation by small rural enterprises in the Jaboticabal region. The use of peanut as a rotation crop in sugarcane renewal areas demands a specific and incremental economic and financial analysis from rural producers, considering that this product requires fixed assets and procedures distinct from the sugarcane crop and, therefore, it is necessary to identify under what conditions peanut cultivation can be profitable to the producer. A quantitative and qualitative approach was used through discounted cash flow combined with cost-volume-profit analysis. It was verified that the economic viability of peanut occurs in areas greater than 88 hectares. Considering the average profile of the region, of 100 ha of planting per year, the rural producer can achieve a Net Present Value (NPV) of R$ 6,480/ha, and an Internal Rate of Return (IRR) of 13.94%, which ensure the economic viability of this crop in a rotation system with sugarcane.

PurposeThe purpose of this article is to evaluate current techniques in capital budget decision making in Canada, including real options, and to integrate the results with similar previous studies.Design/methodology/approachA mail survey was conducted, which included 88 large firms in Canada.FindingsTrends towards sophisticated techniques have continued; however, even in large firms, 17 percent did not use discounted cash flow (DCF). Of those which did, the majority favoured net present value (NPV) and internal rate of return (IRR). Overall between one in ten to one in three were not correctly applying certain aspects of DCF. Only 8 percent used real options.Research limitations/implicationsOne limitation is that the survey does not indicate why managers continue using less advanced capital budgeting decision techniques. A second is that choice of population may bias results to large firms in Canada.Practical implicationsThe main area for management focus is real options. Other areas for improvement are administrative procedures, using the weighted average cost of capital (WACC), adjusting the WACC for different projects or divisions, employing target or market values for weights, and not including interest expenses in project cash flows. A small proportion of managers also need to start using DCF.Originality/valueThe evaluation shows there still remains a theory‐practice gap in the detailed elements of DCF capital budgeting decision techniques, and in real options. Further, it is valuable to take stock of a concept that has been developed over a number of years. What this paper offers is a fine‐grained analysis of investment decision making, a synthesis and integration of several studies on DCF where new comparisons are made, advice to managers and thus opportunities to improve investment decision making.

The purpose of this project was to investigate the capital budgeting practice in the largest firms in Qatar. A survey was conducted of the 170 largest firms and corporations. A total of 55 completed surveys were received, for a response rate of 34 percent. The results showed that Qatari companies in general tend to adopt the discounted cash flow methods, with Net Present Value (NPV), Profitability Index (PI) and the Internal Rate of Return (IRR) being the most widely used methods. Capital asset Pricing Model (CAPM) including some extra “risk factors” was used to estimate the cost of capital in more than half of the companies. Companies tend to use the cost of debt plus some premium as the discount rate, and they frequently reviewed and adjusted that rate, mainly as to the expected changes in the project’s risk. The terminal value was commonly estimated using the present value of future cash flow in perpetuity and multiples of terminal earnings.

Over the past 60 years Net Present Value (NPV) and the Internal Rate of Return (IRR) have emerged from obscurity to become the overwhelming choices for the quantitative measurement of investment attractiveness in modern corporations. Despite their current popularity, neither NPV nor IRR was designed to deal effectively with the vast majority of investment problems, meaning those where periodic free cashflowsaregeneratedbetweenthetimeofassetpurchaseandthetimeofsale.NPV assumes that periodic cash flows can and will be reinvested at the NPV discount rate, either at the cost of capital or another risk adjusted discount rate; IRR assumes reinvestment at the IRR. Neither assumption is usually realistic. In addition, when evaluating projects in terms of their financial attractiveness, the two measures may rank projects differently. This becomes important when capital budgets are limited. Finally, a project may have several IRRs if cash flows go from negative to positive more than once. The Modified Internal Rate of Return (MIRR), discovered in the 18th century, does account for these cash flows. This article explains the problems with NPV and IRR, describes how MIRR works, and demonstrates how MIRR deals with weaknesses in NPV and IRR.

This paper discusses the sensitivity analysis of valuation equations used in investment decisions. Since financial decision are commonly supported via a point value of some criterion of economic relevance (net present value, economic value added, internal rate of return, etc.), we focus on local sensitivity analysis. In particular, we present the differential importance measure (DIM) and discuss its relation to elasticity and other local sensitivity analysis techniques in the context of discounted cash flow valuation models. We present general results of the net present value and internal rate of return sensitivity on changes in the cash flows. Specific results are obtained for a valuation model of projects under severe survival risk used in the industry sector of power generation.

The purpose of this study was to determine what capital budgeting and cost of capital procedures are being used in the food service segment of the hospitality industry and to compare the responses, where possible, with those reported in the previous studies of capital budgeting techniques in the hospitality industry. The most popular primary capital budgeting techniques selected were the sophisticated or discounted cash flow methods, such as net present value and internal rate of return. The payback method was selected as a secondary technique.

O presente estudo objetivou avaliar a viabilidade econômica de um projeto de produção e comercialização do Feno Enriquecido Extrusado (FEE) como dieta completa para equinos. O estudo baseou-se em levantamento de dados e cotação de preços de atividades que envolvem desde o preparo da terra (correção, plantio e adubação) até o beneficiamento do produto na fábrica (extrusão) e comercialização. Foram considerados também os custos com transporte e tributações. Para o cálculo dos indicadores de rentabilidade utilizou-se o método do Fluxo de Caixa Descontado (período de 30 anos) e da Demonstração de Resultados do Exercício (DRE). Os cálculos foram desenvolvidos utilizando planilhas eletrônicas do pacote Microsoft Office Excel®. Foram simulados três cenários de produção com diferentes preços ao consumidor: Cenário 1) equivalente à dieta completa, onde os ingredientes são fornecidos em conjunto, mas adquiridos separadamente; Cenário 2) considerando um valor 10% maior que o da dieta completa; Cenário 3) considerando um valor 20% maior que o da dieta completa. Pôde-se observar que o projeto foi viável economicamente nos três cenários sugeridos com Valor Presente Líquido (VPL) positivo, Taxa Interna de Retorno (TIR) maior que 9,4% aa e payback de 11 a 2 anos. A produção de FEE pode ser um investimento promissor tanto pela qualidade do produto e facilidade de uso quanto pelo rápido retorno do capital investido.

Research carried out in recent decades shows that the use of discounted cash flow (DCF) methods for engineering project evaluation has increased enormously. Klammer and Walker (1984) established in 1984 that in the USA the use of discounting grew from 19 percent in 1960 to 57 percent in 1970. Their research further stated that the use of discounted cash flow methods grew to 75 percent in 1980 for those projects dealing with the expansion of existing capacities. A few years later, Pike (1988) established that the use of either the internal rate of return or net present value methods in large UK companies grew from 58 percent to 84 percent between 1975 and 1986. Research carried out by Psunder and Ferlan (2007 & 2008) among Slovenian project managers shows that the use of discounted cash flow methods depends on the project managers’ field of education. Among project managers who have an education in civil engineering, only 50 percent use the net present value method and 66.7 percent the internal rate of return. Among mechanical engineers, 62.5 percent use the net present value method and 87.5 percent the internal rate of return.

The objective of this research is to develop cost-effective surfactant flooding technology by using simulation studies to evaluate and optimize alternative design strategies taking into account reservoir characteristics process chemistry, and process design options such as horizontal wells. Task 1 is the development of an improved numerical method for our simulator that will enable us to solve a wider class of these difficult simulation problems accurately and affordably. Task 2 is the application of this simulator to the optimization of surfactant flooding to reduce its risk and cost. In this quarter, we have continued working on Task 2 to optimize surfactant flooding design and have included economic analysis to the optimization process. An economic model was developed using a spreadsheet and the discounted cash flow (DCF) method of economic analysis. The model was designed specifically for a domestic onshore surfactant flood and has been used to economically evaluate previous work that used a technical approach to optimization. The DCF model outputs common economic decision making criteria, such as net present value (NPV), internal rate of return (IRR), and payback period.

The cultivation of cocoa (Theobroma cacao) has been an important driver of tropical deforestation globally. Efforts to reverse this trend are focusing on the reintroduction of shade trees to cocoa plantations. Shade trees are valuable in enhancing biophysical conditions on cocoa fields and contribute to biodiversity and product diversification for smallholder producers. The aim of this study was to compare financial analysis of cocoa agroforestry between in state forest land and private land. Financial analysis was undertaken to assess its economic viability. Input–output data were collected from farmer by interview and participant observation. A discounted cash flow analysis was carried out to estimate the benefit-cost (B/C) ratio, net present value (NPV), internal rate of return (IRR) at 6,4% discount rate. The results showed that the main combination of planting pattern that consist of cacao and banana (in state forest land), cacao and petai, cacao and durian (in private land) were financially feasible; the largest contribution was given by cacao at all planting patterns based on farmer household revenue structure. Key words: Financial analysis, cocoa, agroforestry, land tenure security

This article discusses and critiques yield-based capital budgeting techniques that have arisen over the past 30 years. Some have theoretical inconsistencies, while some work well only for certain kinds of problems. A new method, the marginal return on invested capital, is presented. The method's application is general; it gives accept/reject signals and rankings consistent with the net present value method.

Considering the various costs of current existing three biomass firing models in China, the most economically feasible biomass firing model is obtained according to discounted cash flow (DCF) methodology, which refers to net present value(NPV), payback period (n p ), internal rate of return(IRR) and discounted fuel price. Due to lower shipping cost and initial investment in equipments the biomass co-firing in PC furnace is better than dedicated biomass firing in grate furnace. And biomass pellet co-firing in existing larger capacity PC furnace is the most economical, followed by co-firing with rebuilt biomass firing device, dedicated biomass firing in grate furnace is the worse. Biomass pellet co-firing in existing larger capacity PC furnace has the highest NPV and IRR as well as the shortest n p . Dedicated biomass firing in grate furnace has the second NPV, the lowest IRR and the longest np with state subsidy, without the state subsidy it is serious deficit. Meanwhile, biomass pellet co-firing in existing larger capacity PC furnace can save discounted fuel costs 25.9 RMB/ton and 14.07 RMB/ton in comparison with co-firing in PC furnace with rebuilt biomass firing device and dedicated biomass firing in grate furnace. And the economic benefits of co-firing can be further improved by taking account of the additional environmental benefits and higher boiler efficiency.

Over the last decade, italian real estate market has been characterized by a steady decline in prices and demand; the phenomenon, conjunctural to a broader crisis of the european and world economy, has affected every intended use and localization, but especially the residential sector, where, at least in Italy, over 70% of all of the sales and leases are concentrated. When the market is characterized by a high degree of uncertainty about the future evolution of his prices and, consequently, about the risk on the use of the capital, the assessment of economic and financial sustainability of real estate projects, especially if characterized by a high public value, becomes crucial in order to operate the right investment choices. Interationally, the most widely used methodology for this assessment is the Discounted Cash Flow analysis (DCFA); this tool is based on the method of the discounted cash flows, namely on the discount of the balances between costs and revenues within the estimated duration of the investment. Both in public and private sectors, an intervention is considered sustainable when it is able to generate a total balance of the positive cash flows (Net Present Value) and an annual percentage of return (Internal Rate of Return - IRR), that are greater than the ones generated by alternative investments at low (or no) risk ( Prizzon, 1997 ). The correct estimate of the costs and revenues generated from an investment becomes a crucial phase for the purposes of a reliable calculation of sustainability indicators. The difficulties concerning the costs and their accurate valuation are essentially attributable to the level of the information that is available at the time of the drafting of the project and, consequently, to the chosen method of estimation (synthetic in the concept and the design phases, analytical in the final and executive stages). When the project deals with former industrial areas, characterized by the presence of pollutants in the soil or subsoil, at the previous difficulties it is added also the uncertainty related to the correct estimate of remediation costs; these costs can only be evaluated with sufficient reliability when all the analysis related to the type of those substances have been developed and when the procedures of the intervention are defined. In relation to these operating environments, this contribution is the result of the valuations of the economic and financial sustainability of some recovery and renovation's projects developed on the area of the former Tessitoria Schiatti, in Lentate sul Seveso (Italy) (that have) It has been carried out by the students of the Workshop in Architectural Project and Constructions of the Politecnico di Milano (proff. B. Croce, S. Cattaneo, L. Sdino). These results confirm that because of the major cost of the reclamation, the feasibility of every proposed project cannot prescind from a public financial contribution that will cover those higher costs.

This research investigated the issues and methods of analysis considered by executives when managing biotechnology drug candidates within the research and development (R&D) pipeline. A mail survey was developed to assess: (1) factors considered during clinical trials; (2) sources of funding for R&D; (3) analytic tools used in decision-making; and (4) the use and application of pharmacoeconomics, and targeted primarily Chief Financial Officers (CFO) within 396 biotechnology firms in the United States (US). Consistent with prior research on CFOs, a response rate of 7.5 per cent was achieved and respondents generally represented smaller biotechnology companies valued below US$100m. Findings indicated that regulatory and capital requirements as well as investor expectations were important factors throughout clinical phase trials. Venture capital and capital/securities markets were the most commonly used sources of R&D capital. The most frequently cited decision-making techniques used included prior experience/intuition/human judgment, net present value (NPV), and internal rate of return (IRR). Pharmacoeconomic methods were utilised at every stage of R&D and applied to the management of R&D pipelines in addition to aspects of product pricing and reimbursement. Overall, these results reflect the nature of risk and uncertainty associated with pharmaceutical and biotechnology R&D. Although the use of past experience/intuition/human judgment was most common for decision-making, methods based upon discounted cash flow (DCF) approaches were also employed frequently, as was the use of pharmacoeconomics. The implications of this work should seek to catalyse the development and utilisation of robust methods to manage drug pipelines such that senior executives are afforded optimal recommendations when attempting to hedge risk and maximise return.

Penetration of the renewable market of Photovoltaic PV technologies calls for the extension of the additional values generated from the technology including climate and social co-benefits as radical innovations in a new business model. Compared with existing PV business models, this paper extends the value proposition into operation system and customer segmentation, investigated by a pilot demonstration of PV water pumping (PVWP) systems for the conservation of grassland and farmland in China. The paper suggests that the integrated PVWP systems can combine the implementation of technology with environmental co-benefits, agricultural products by developing an interactive interface to link a social network. This can further disseminate benefits to stimulate the active participations of investments from individuals and corporations. Discounted cash flow (DCF) model and net present value (NPV) evaluations have been conducted on the traditional PV roof, PVWP pilot and PVWP scale up scenarios. The results show that the scenario of integrated PVWP system with social network products can significantly improve the payback period (PP) and increase internal rate of return (IRR). Based on the PVWP pilots and relevant industrial environments, the results in this paper provide how the innovative PV business model innovation can improve the present practices and policies on PV technologies implementation.

he theory of capital budgeting has been studied extensively in recent years, and there is a growing body of literature describing the capital budgeting techniques employed by industrial firms. However, in spite of the importance of public utilities, virtually no studies relating to these firms' capital budgeting practices have appeared in the financial journals. This article is aimed at this gap. A number of capital investment selection criteria have been identified in the literalurc of finance. The four most frequently mentioned are payback, average rate of return, ARR. internal rate of return. IRR, and net present value, NPV. The NPV method is generally regarded as being the "best" in some theoretical senses, while the IRR method is a somewhat distant second. Boih payback and ARR, which may be defined in serveral ways, are generally regarded as being distinctly inferior to the two techniques employing discounted cash flow. Although theory has been extended very elegantly in recent years, the basic techniques were specified reasonably well and widely publicized by the latter 195O's. Once basic theories were accepted academically, various researchers questioned whether or nol business practiced what the academic community preached. Istvan [4, 5], Pfiomn [7], and Soldofsky [8] studied this question in the early 196O's and reported that relatively few firms employed the recommended DCF techniques. The studies by Christy [2], the National Association of Accountants [6], and Terborgh [9], all done in the latter half of the l960"s, indicated an increasing use of DCF methods, but they also showed that the payback and ARR were far more widely used. The most recent studies of national firms, the ones by Klammcr [3] and by Abdelsamad [I], showed a continuation of the trend toward DCF; however. 43% of the firms in Klammer's study were still using a non-DCF method in 1970. Two explanations for the non-use, or at least limited use, of DCF were offered. The first hypothesis is that there is simply a learning-and-action lag; the second is that the cost of using a DCF technique may, in some inslances. exceed its benefits. Although neither of these hypotheses has been "proved," our own studies suggest that there is some validity to both. Accordingly, we think thai the use of DCF will increase, but it is most unlikely that any future sttidy will ever find that nil investment decisions are made using a DCF cutoff criterion.