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We test whether asymmetric preferences for losses versus gains affect the prices of cash flow versus discount rate risk. We construct a return decomposition distinguishing cash flow and discount rate betas in up and down markets. Using U.S. data, we find that downside cash flow and discount rate betas carry the largest premia. Downside cash flow risk is priced consistently across different samples, periods, and return decomposition methods. It is the only component of beta with significant out-of-sample predictive ability. Downside cash flow premia mainly occur for small stocks, while large stocks are compensated for symmetric cash-flow-related risk. [ABSTRACT FROM PUBLISHER]

Time, cost, and quality have been known as the project iron triangles and substantial factors in construction projects. Several studies have been conducted on time-cost-quality trade-off problems so far, however, none of them has considered the time value of money. In this paper, a multi-objective mathematical programming model is developed for time-cost-quality trade-off scheduling problems in construction projects considering the time value of money, since the time value of money, which is decreased during a long period of time, is a very important matter. Three objective functions of time, cost, and quality are taken into consideration. The cost objective function includes holding cost and negative cash flows. In this model, the net present value (NPV) of negative cash flow is calculated considering the costs of non-renewable (consumable) and renewable resources in each time period of executing activities, which can be mentioned as the other contribution of this study. Then, three metaheuristic algorithms including multi-objective grey wolf optimizer (MOGWO), non-dominated sorting genetic algorithm (NSGA-II), and multi-objective particle swarm optimization (MOPSO) are applied, and their performance is evaluated using six metrics introduced in the literature. Finally, a bridge construction project is considered as a real case study. The findings show that considering the time value of money can prevent cost overrun in projects. Additionally, the results indicate that the MOGWO algorithm outperforms the NSGA-II and MOPSO algorithms.

Policies that attempt to balance timber production with non-market values that forests provide are common across the United States. Such is the case in northern Maine, USA, where management of critical areas of mature softwood-dominated forest are regulated through the State’s primary wildlife management agency. We use a case study approach with qualitative and quantitative analyses to understand the persistent difficulties encountered by both forest and wildlife managers when implementing this policy. Interviews with foresters and wildlife biologists established the management parameters, and simulated management scenarios compared forest management outcomes with respect to both financial and wildlife habitat provision goals. The model results indicated that there are opportunities for comparable revenues within regulated habitat areas as without, although the returns varied due to legacy of previous management and species composition. More importantly, the interviews revealed that differing habitat metrics used by foresters and biologists are a barrier to communication and management planning, and thus also a barrier to effective policy implementation. We close with thoughts on the applicability of both the methods and results to other situations where an understanding of multiple-use forest policy implementation is desired.

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SYNOPSIS: We provide insights into the inputs and valuation models used by valuation specialists. We survey 172 valuation specialists and conduct several follow-up interviews covering various topics, including the valuation inputs, models, and industry information that they use, as well as how they estimate long-term growth and the cost of capital. We find that valuation specialists rely on their professional judgment to select a valuation model but prefer the discounted cash flow (DCF) model. They primarily rely on the firm's historical performance when forecasting the financial statements, but communication with management is particularly relevant for forecasting future earnings or cash flows. When estimating the cost of capital, they most commonly use the risk-free rate with subjective adjustments. The results of our study provide insights on the information use of valuation specialists that are relevant to other valuation specialists, managers, academic researchers, and regulators. JEL classification: M41; G12; G17; G32. [ABSTRACT FROM AUTHOR]

Copyright of Revista de Gestão, Finanças E Contabilidade is the property of Universidade do Estado da Bahia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The Discounted Cash Flow (DCF) method is probably the most extended approach used in company valuation, its main drawbacks being probably the known extreme sensitivity to key variables such as Weighted Average Cost of Capital (WACC) and Free Cash Flow (FCF) estimations not unquestionably obtained. In this paper we propose an unbiased and systematic DCF method which allows us to value private equity by leveraging on stock markets evidences, based on a twofold approach: First, the use of the inverse method assesses the existence of a coherent WACC that positively compares with market observations; second, different FCF forecasting methods are benchmarked and shown to correspond with actual valuations. We use financial historical data including 42 companies in five sectors, extracted from Eikon-Reuters. Our results show that WACC and FCF forecasting are not coherent with market expectations along time, with sectors, or with market regions, when only historical and endogenous variables are taken into account. The best estimates are found when exogenous variables, operational normalization of input space, and data-driven linear techniques are considered (Root Mean Square Error of 6.51). Our method suggests that FCFs and their positive alignment with Market Capitalization and the subordinate enterprise value are the most influencing variables. The fine-tuning of the methods presented here, along with an exhaustive analysis using nonlinear machine-learning techniques, are developed and discussed in the companion paper. [ABSTRACT FROM AUTHOR]

Residual income valuation was already known and used in valuation theory and practice previously, however, the method has been subject to increasing attention in the past decades. By comparing the discounted cash flow method and the residual income model, this paper seeks to answer the question of what practical implications the difference in theory results in. The discounted cash flow method continues to be widely popular in literature and international practice, however, it may give rise to flawed results in certain cases. With the help of specific business examples, the study highlights that in such cases, the risks of under or overestimation can be mitigated with the help of the RIM model. The largest benefit of the residual income model compared to the DCF method is that instead of deriving the value solely from the future, it gives a central role to the already known book value, and the speculative value - determined based on the accounting income - plays a less significant role in the course of valuation. [ABSTRACT FROM AUTHOR]

Vendor managed inventory (VMI) is a concept of supply chain in which a vendor (supplier or manufacturer) has the charge for optimizing the inventory held by a buyer (or retailer). In traditional VMI modelling, it is often assumed that the vendor offers cash on delivery payment terms to the buyer. But in real world the vendors usually offer different types of payment policies to promote their commodities and influence the buyers ordering policies. Some of the common payment policies are cash on delivery, cash before delivery (advance payment), delayed payment (trade credit) etc. In the present paper mathematical model is developed for VMI system by comparing two payment policies between vendor and buyer. In policy (I) buyer pays for an items as soon as he receives it from the vendor, i.e. CASH ON DELIVERY and in policy (II) buyer pays for an item at the time of placing an order, i.e. CASH BEFORE DELIVERY. Discounted cash flow (DCF) approach has been used for proper recognition of cash flows. Numerical illustrations and sensitivity analysis are performed between two payment policies and it is shown that VMI system is beneficial for both vendor and buyer under both payment policies and policy II is better than policy I for both VMI system and non VMI system. [ABSTRACT FROM AUTHOR]

The search for an unbiased company valuation method to reduce uncertainty, whether or not it is automatic, has been a relevant topic in social sciences and business development for decades. Many methods have been described in the literature, but consensus has not been reached. In the companion paper we aimed to review the assessment capabilities of traditional company valuation model, based on company's intrinsic value using the Discounted Cash Flow (DCF). In this paper, we capitalized on the potential of exogenous information combined with Machine Learning (ML) techniques. To do so, we performed an extensive analysis to evaluate the predictive capabilities with up to 18 different ML techniques. Endogenous variables (features) related to value creation (DCF) were proved to be crucial elements for the models, while the incorporation of exogenous, industry/country specific ones, incrementally improves the ML performance. Bagging Trees, Supported Vector Machine Regression, Gaussian Process Regression methods consistently provided the best results. We concluded that an unbiased model can be created based on endogenous and exogenous information to build a reference framework, to price and benchmark Enterprise Value for valuation and credit risk assessment. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Petroleum Research & Studies is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Ciencias Administrativas is the property of Universidad Nacional de La Plata and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The DCF (Discounted Cash Flow) approach capitalizes prospectus eamings forecasts using comparable company DCF multiples. For both methods, the estimated values are compared to actual market prices to obtain a valuation error. The discounted cash flow method can be applied in the valuation of banking companies in this method all future cash flows are discounted to the present value. From a theoretical point of view, it is considered the most correct but perhaps also the most complex. Very important in this approach are the accuracy with which future revenue streams are estimated and the correctness of setting the discount rate level. This paper examines the accuracy of discounted cash flow (DCF) methods of equity valuation for firms that obtained listing on the bank. The DCF method is implemented by discounting cash flow forecasts based on information contained in listing prospectuses. [ABSTRACT FROM AUTHOR]

The motive of this research is to describe a replenishment model for unpreserved items taking into account of the time value of money under the fuzzy situation. This model follows the discounted cash flow (DCF) approach to explore inventory replenishment difficulty over a fixed planning horizon. Upgrading of this model without backlogging has shown that the total variable cost is minimized and convex under fuzzy environment. Numerical examples are to reveal the applicability of the anticipated models with respect to the different parameters of the system. [ABSTRACT FROM AUTHOR]

With limited financial resources, decision-makers in firms and governments face the task of selecting the best portfolio of projects to invest in. As the pool of project proposals increases and more realistic constraints are considered, the problem becomes NP-hard. Thus, metaheuristics have been employed for solving large instances of the project portfolio selection problem (PPSP). However, most of the existing works do not account for uncertainty. This paper contributes to close this gap by analyzing a stochastic version of the PPSP: the goal is to maximize the expected net present value of the inversion, while considering random cash flows and discount rates in future periods, as well as a rich set of constraints including the maximum risk allowed. To solve this stochastic PPSP, a simulation-optimization algorithm is introduced. Our approach integrates a variable neighborhood search metaheuristic with Monte Carlo simulation. A series of computational experiments contribute to validate our approach and illustrate how the solutions vary as the level of uncertainty increases. [ABSTRACT FROM AUTHOR]

Public policymakers face the challenge of maintaining incentives for investments in fiber-to-the-premises (FTTP) infrastructure while simultaneously enabling effective competition. In that regard, the ability of vertically integrated operators to discriminate against downstream rivals is regarded as a major regulatory problem, especially as policing nondiscrimination obligations is notoriously difficult for vertically integrated operators. The European regulatory framework mandates functional separation to eliminate discrimination incentives. However, this measure comes with significant drawbacks and caveats and resembles a strong market and ownership intervention. The present article discusses how voluntary vertical separation can achieve the positive effect of a vertically separated industry structure without the need for strong market interventions. We use a discounted cash flow model to compare the financial attractiveness of wholesale-only and integrated business models for a greenfield FTTP rollout. We further discuss and test how public policymakers could positively affect the profitability of a wholesale-only business model. Based on our findings, we recommend public-policymakers and national regulation authorities to proactively define separation scenarios and respective ex ante regulation reductions precisely, to make adjustments to broadband state aid programs that favor wholesale-only providers, and to critically reflect the hampering effect volume and time discount wholesale tariff structures of incumbents have on the emergence of wholesale-only networks. [ABSTRACT FROM AUTHOR]

Real estate development has received less scrutiny than real estate investment in terms of appraisal practices and performance measurement. This is despite the inherent uncertainty and financial risks associated with development as an activity. We investigate market practices regarding performance metrics and return expectations both for residential and commercial real estate development in the UK, exploring what is considered as an appropriate return and how this varies according to type and duration of scheme, and method of appraisal used. After examining the literature and the information available on ex-post returns from development activity, results from a survey of real estate developers are reported, supplemented by findings from interviews. The results suggest that the use of traditional residual valuation techniques dominates discounted cash flow models when appraising development projects, particularly among residential developers, while profit-on-cost and profit-on-value are the most popular metrics for quantifying required returns. Unlike NPV or IRR, these metrics do not account for the timing of cash flows, raising questions about the robustness of appraisals in this sector. Such metrics might suffice if required profits are adjusted in ways that are consistent with scheme duration and risks, but it is unclear that this is currently the case. [ABSTRACT FROM AUTHOR]

According to environmental considerations, the traditional supply chain has replaced with a closed-loop supply chain. This study attempts to design the polyethylene tanks closed-loop supply chain network under uncertainty. The proposed network contains various levels such as suppliers, manufacturing plants, distribution warehouses, and retailers. A mixed integer linear programming model is developed with a single-objective, multiple products and multiple periods. Besides, after-sales service is considered that has economic and environmental effects on the supply chain and leads to customers' satisfaction and loyalty. To deal with uncertainty, possibilistic programming is used. Therefore, some parameters of the model are considered as a fuzzy number with a triangular probability distribution. Also, a method based on decision tree and discounted cash flow is utilized to analyze the problem in multiple periods. Furthermore, to validate and show the applicability of the proposed model, a real case study is performed in the polyethylene tanks industry. Finally, the sensitivity analysis is used to check the robustness of the proposed model and framework. The results show that the net present value of the supply chain under new condition is increased by 0.8%. The results of this research can be useful for managers of the organizations. [ABSTRACT FROM AUTHOR]

• Designed a novel process aimed at CO 2 conversion to methanol. • Water electrolysis is combined with tri-reforming of methane to generate syngas. • The designed methanol plant has a net energy efficiency of 62 %. • 570,000 t of CO 2 can be mitigated annually by using carbon-free electricity. • Economic analysis reveals the breakeven price of methanol is US$491/ton. CO 2 utilization via methanol synthesis can be an effective approach to mitigate the issue of global warming. This study developed an innovative process to produce methanol by combining water electrolysis with tri-reforming of methane (TRM). The proposed design utilized carbon-free electricity to split water into O 2 and H 2 ; O 2 is collected for partial oxidation reaction in the TRM and H 2 is collected for stoichiometric number (SN) optimization. This process configuration eliminates the typical problems of H 2 surplus or deficit associated with methanol synthesis and allows a substantial amount of CO 2 to be converted. The main process flowsheet was developed with Aspen HYSYS process simulator and then the feasibility of this project was evaluated based on its technical, environmental, and economic performances. The estimated capital expenditure (CAPEX), operating expenditure (OPEX) and GHG emissions of the baseline plant are US$774 million, US$263 million/yr. and −0.14 kgCO 2 eq/kgMeOH, respectively. In particular, water electrolysis process accounted for 34 % of CAPEX and 51 % of OPEX. A discounted cash flow (DCF) model combined with sensitivity analyses showed that a breakeven point could be reached with a methanol price of US$491/ton. The results demonstrated that combining water electrolysis with TRM could achieve a sustainable carbon-sink process for methanol production. [ABSTRACT FROM AUTHOR]

The development of offshore wind farms depends on many technical and economic parameters, which requires an integrated planning approach. Some parameters can be controlled by the wind farm developer, and some are determined by the regulatory authorities. Others can be outside control of both. One aspect of optimizing wind farm development is overplanting, which represents the capacity optimization between installed generation capacity and transmission capacity, which allows for a minor share of energy curtailment to increase the overall value of the farm. Quantifying this value also depends on the regulatory framework, which is analyzed here by comparing United Kingdom and Danish conditions. Using a discounted cash flow model, we find that UK conditions are favorable to overplanting from the developer perspective, where the benefit of using the transmission cable more efficiently supports overplanting. In the Danish case, the private‐economic incentive to overplant is minor due to the constraint of linking subsidies to a certain energy output. On the other hand, when the cost of turbines declines relative to transmission system costs, overplanting tends to become more attractive. This is mostly the case when installing wind farms further offshore compared to projects closer to the coast, which has been exerted more and more exerted in the recent years. In a socioeconomic perspective, overplanting is also a viable method to optimize the wind farm technically and economically, if the cost of the additional turbines is less than the value of the additional generation that can be fed into the grid by the transmission line. This article is categorized under: Wind Power > Economics and PolicyWind Power > Systems and Infrastructure [ABSTRACT FROM AUTHOR]

The traditional discounted cash flow (DCF) model is generally used to estimate the present value of an enterprise or its equity based on expected future parameters such as cash flows, growth rate and discount rate. In the last decade, the reverse DCF model has gained popularity. With this approach, the valuer uses the current market capitalization as a fixed input and seeks those 'critical' values of individual valuation parameters, which – assuming all other parameters remain unchanged – result in a value equal to current market value. This provides a point of comparison for the company's realized performance and may provide insights regarding over or undervaluation. In this study, we develop a novel DCF model and conduct empirical analysis using data of 1001 US manufacturing, service, retail and financial companies. We examine pricing errors and market corrections in the post-crisis era based on the critical cash flow ratio defined in our reverse model. We find evidence of a general undervaluation in US stock markets with different pricing error patterns across industries. Our results confirm market correction mechanisms have worked properly in the post-crisis era with an average reaction time of 2 years, suggesting investors have learned from the crisis. [ABSTRACT FROM AUTHOR]

Providing decision makers and the investment community with transparent methods to value investments in resilience and adaptation measures to protect physical assets from climate change impacts is becoming increasingly critical. To address this need, this paper introduces and utilizes the decoupled net present value (DNPV) valuation methodology. DNPV is a robust method that can incorporate climate change risk into investment analyses. This paper also discusses how the widespread use of traditional valuation methods such as net present value combined with risk-adjusted discount rates introduces a pernicious time bias effect that magnifies stakeholders' misaligned interests and investment horizons, leading investors, both public and private, to significantly underinvest in resilience and adaptation. Furthermore, because traditional valuation methods cannot correlate physical risks (e.g., loss of revenue due to physical damage or lost access to an asset) with discount rates, investments to reduce climate change risks are largely considered as expenses that make the investment less attractive. The DNPV method addresses this issue and offers a viable alternative that can consistently and transparently quantify all risks (market and non-market) in terms of cash flows. This allows investors and stakeholders to quantify in monetary terms the potential exposure of physical assets to climate-related hazards and assess the effect of decisions to invest in resilience and adaptation measures. With the aid of a simple numerical example, the DNPV method is used to illustrate how such actions can be treated as quantifiable risk reduction investment opportunities that result in better investment decisions. [ABSTRACT FROM AUTHOR]

Valuation techniques, such as discounted cash flow and multiples, are applied in transactions and are also relevant for accounting, tax, and litigation issues. Within these and other valuation purposes, the techniques are crucial for "social interactions" like market processes and legal affairs. We examine this "social dimension" of business valuation and look especially at the advancement of valuation knowledge and techniques. For this purpose, we employ an approach based on "actor-network-theory" (ANT). In order to study specific margins of business valuation, the focus lies on the dissemination of the capital asset pricing model (CAPM) in German judicial valuation. We conclude, inter alia, that "the" CAPM has developed into a growing actor-network over the time, a well-established infra-structure which allows other actors to link to it. The CAPM-network deploys specific actors which enable to conduct or implement advantageous actions. In this context we discuss concepts like co-authorities, (vague) labelling, vague referencing and responsibility at a distance. Moreover, we identify specific arguments which are used by courts regarding the application of the CAPM. We suggest that these arguments are particular important to solidify and perpetuate the application of the model in judicial practice. The present study intends to shed light on the process of the construction of valuation techniques, the actors which are involved in this process, and the interactions of these actors. In doing so, we intend to facilitate and objectify the dialogue between actors in business valuation and thus to improve further ambitions to construct valuation techniques. [ABSTRACT FROM AUTHOR]

More than decades, Indonesia's economic growth depend on the oil and gas sector. In the past few years, oil and gas sector's contribution to the state revenue decreased significantly along with the decline in reserves and production. The state revenue from the oil and gas industry decreased by almost 80 percent from Rp216 trillion in 2014 or 14 percent of state revenue to Rp44 trillion in 2016 or 2.8 percent of the state revenue. Perusahaan Gas Negara or also called as PGN is the largest national company in the natural gas transportation and distribution sector. In or der to make the business growing wider, PGN are going to acquiring Pertamina Gas or Pertagas. The acquisition is part of the establishment of the holding company in energy sector by the Ministry of State Own Enterprises, which was established on April 11, 2018. This research is made to know how the intrinsic value per share of Perusahaan Gas Negara (PGN) through calculating it with the discounted cash flow method using free cash flow to the firm. The data are obtained from PGN's financial report from 2013 to 2018. The result is the intrinsic value per share of Perusahaan Gas Negara is IDR Rp6,757.72. [ABSTRACT FROM AUTHOR]

Ethanol is a material that has a high demand from different industries such as fuel, beverages, and other industrial applications. Commonly, ethanol has been produced from yeast fermentation using sugar crops as a feedstock. However, food waste (FW) was found to be one of the promising resources to produce ethanol because it contained a higher amount of glucose. Generally, column distillation has been used to separate ethanol from the fermentation broth, but this operation is considered an energy-intensive process. On the contrary, membrane distillation is expected to be more practical and cost-effective because of its lower energy requirement. Therefore, this study aims to make a comparison of economic performance on FW fermentation with membrane distillation and a conventional distillation system using techno-economy analysis (TEA) method. A commercial-scale FW fermentation plant was modeled using SuperPro Designer V9.0 Modeling. Discounted cash flow analysis was employed to determine ethanol minimum selling price (MSP) for both distillation systems at 10% of the internal rate of return. Results from this analysis showed that membrane distillation has a higher MSP than a conventional process, $6.24 and $2.41 per gallon ($1.65 and $0.64 per liter) respectively. Hence, this study found that membrane distillation is not economical to be implemented in commercial-scale ethanol production. [ABSTRACT FROM AUTHOR]

We consider a company that schedules the tasks of its projects to maximize their expected net present value (ENPV) when tasks may fail. The failure of any task terminates the project immediately. We show that for projects with certain decreasing failure rates, the ENPV optimization problem can be solved using a linear program. The main focus of our work is on how constant task failure rates contribute to decreasing project risk as tasks are completed. Under constant task failure rate, earlier completion of a task improves its probability of success and the risk profile of the project. However, it may also accelerate costs, which worsen discounted cash flow. We show the equivalence of cash flow discount rate and failure rate. Further, if task failures are independent, then the failure rates are additive. We develop a model that (a) recognizes the reduction in project risk when a task is completed, (b) implements this risk reduction into the ENPV calculation, and (c) permits optimization of the ENPV through sequencing and timing decisions for the tasks. We design an algorithm to solve the problem optimally. This enables us to validate the contributions of our work using two computational studies. The first study demonstrates a significant increase in maximum project ENPV from improved project scheduling. The second study demonstrates a significant increase in total project portfolio value as a result of better informed project selection. Our work motivates companies to develop more precise information about the failure risks of their project tasks. [ABSTRACT FROM AUTHOR]

Green ammonia production is facing increasing interest on a global scale as a hydrogen carrier for power generation as well as fertilizer for food production. The conventional Haber-Bosch method for ammonia synthesis is energy demanding, requires high purity hydrogen, and is based on fossil fuels. A preliminary techno-economic model for electrochemical ammonia synthesis at near ambient pressure using feed rates of 32 metric ton/day for hydrogen and 135 metric ton/day for nitrogen is presented in this study. Various pathways using different methods for nitrogen generation and hydrogen production were investigated to gain insight into added energy savings per metric ton of ammonia. Electrochemical synthesis using electrolysis for hydrogen and cryogenic nitrogen was found to be a potentially viable pathway for green ammonia. The profitability metrics including discounted cash flow rate of return, net present value and discounted payback period were estimated to be 8%, $40 MM, and 4–6 years respectively for this pathway. The cost of electricity, conversion rate, and conversion efficiency dominate the tonnage cost of ammonia and were used to assess the feasibility of the model. A life cycle assessment was also conducted to assess the environmental impact of a well to product ammonia process. • Integrated electrochemical ammonia systems with renewable intermittent sources has. linear scalability advantages. • Energy consumption of at least 17 MWh per metric ton for electrochemical ammonia. • Number of modules decreases with current density. • Specific energy decreases as the production rate increases. [ABSTRACT FROM AUTHOR]

Rationale for selection and calculation of the optimal system for the development of the Pechora Sea oil field is an extremely difficult scientific-technical task. Severe climate conditions of the Arctic region, ice cover, well stock formation limits, slow rates of drilling for offshore oil fields, and remoteness from supply bases multiply the cost of projects and create significant difficulties in engineering design the field development system. To solve these problems, one needs to use highly efficient technologies for offshore oil fields development, which will ensure intensive oil production, thus obtaining significant revenues to pay off the expenses. The purpose of this work is to provide the basis for selection as well as calculate the optimum development system for an oil field in the eastern part of the Pechora Sea. The solution of the tasks was carried out on the basis of the features identified in the development of Arctic offshore oil fields, the analysis of geological and physical data on the oil field, a set of theoretical, analytical works, and mathematical modeling. Mathematical modeling was performed using standard and adapted methods for calculating oil field development systems. Based on the data received, it was concluded that it is the linear system of horizontal wells, which is optimal for the field development. Horizontal wells critical and initial flow rate and basic technical indicators have been calculated versus time. The estimation of the discounted cash flow and the discounted profit index has demonstrated that the investment project can be initiated. Since the oil field is now under supplementary exploration, the data obtained in the research can be applied for designing the oil field development system as soon as its industrial exploitation is approved. [ABSTRACT FROM AUTHOR]

The article examines challenges faced by law practitioners while considering the subject industry when applying the income approach in a family law context. Topics discussed include use of discounted cash flow (DCF) method while valuing any business with the income approach; estimation/projection of future income; and role of the subject industry within the income approach.

Irrefutably, energy transition has recently gathered momentum thanks to the Paris Agreement and renewable energy (RE) falling costs. However, unlocking the full socio-economic potential of energy transition requires encouraging Foreign Direct Investment (FDI) in developing countries where energy demand and the risk of stranded assets are growing. Encouraging FDI in developing countries necessitates addressing two highly controversial issues: measuring political risk and carrying out proper valuation of long-term RE investments. In this regard, current paper investigates the rationale behind classic risk-adjusted discount rate (RADR) approach. It finds that since RADR requires heuristics, it may lead to misrepresentation of real worth of RE projects in developing countries. Addressing this issue, the paper offers a hybrid method based on risk pricing which can incorporate political risk into valuation straightforwardly. The hybrid method is applied to a photovoltaic case in Iran. Surprisingly, while the analysis based on classic RADR approach indicates that the investment is not financially viable, the hybrid analysis demonstrates attractive return on the investment. This can contribute to unlocking a considerable annual amount of 270 TWh solar power in Iran. The empirical study also shows that the suitable rate to discount RE investments in Iran is 10.22%. • Foreign Direct Investment can create a game-changing shift in energy market. • Risks should be reflected in cash flow instead of discount rate. • Sovereign spread is not a good proxy for political risk. • An alternative approach to value renewable energy investments is proposed. • The method can unlock investment in renewables in developing counties. [ABSTRACT FROM AUTHOR]

The study aims to explore the role of the real options practices to an appraisal of capital investment decisions. We deployed the Binary logistic regression technique to test the hypotheses of the study. For the binary model, two equations were developed having two dependent variables, first the use of real options, and the second the real options familiarity. The independent variables of the study were the annual capital budget, Capex time, Net profit margin, and R&D. The finding showed listed companies relied on discounted cash flow techniques (DCF). A very few were practising real options only for supplement and to support results from other methods. The real options require too much sophistication and lack of top management support is the major reason for not using real options. The use of real options having a significant relation to the Annual Capital Budget, Net Profit Margin, and R & D, Capex time. Real options Familiarity having a significant relationship with Net Profit Margin and R & D and insignificant with Annual Capital Budget. DCF method is rigid and cannot incorporate the uncertain future and upcoming opportunities. Corporate and academia are suggested to concentrate on real options practised to make the right decision for the corporate, industry, and country progress. [ABSTRACT FROM AUTHOR]

Copyright of Gestión Joven is the property of Asociacion Espanola de Contabilidad y Administracion de Empresas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Przegląd Elektrotechniczny is the property of Przeglad Elektrotechniczny and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Mexican Journal of Economics & Finance / Revista Mexicana de Economia y Finanzas is the property of Instituto Mexicano de Ejecutivos de Finanzas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Modern performance measures should provide an accurate assessment of the intrinsic value of the company, as well as the value for the owners (shareholders). The essence is maximizing the immanent or guaranteed value of the company. Free cash flow is a starting point for many valuation ratios, including discounted cash flow, price to cash flow (or its inverse, the free cash flow yield). The Discounted Cash Flow (DCF) valuation reflects the ability of the company to generate cash in future. In knowledge economy the main goal of a company should be directed generating the value for the firm and owners. This implicated the rising importance of free cash flow methodologies that enable investors to efficiently value the companies. The aim of this paper is to present practical approach towards the discounted cash flow of the company (free cash flow to the firm and free cash flow to equity) as valuation method.

The inability of existing analytical models to accurately predict future events has, at times, led to the economic failure of mining operations whose financial viabilities were determined based on static assumptions, leaving operational managers with little room to make future decisions. Therefore, the application of a robust decision-making tool, such as Real Options (RO) can minimise losses and more accurately express uncertainty. This paper has considered a stochastic simulation to analyse ROs for a real case iron ore mine, which closed in April 2016. In comparing the net present value from the traditional discounted cash flow (DCF) method to delay, to abandon the operations and to stage the investment options, the ROs method increased the project value by between 56% and 195% depending on the volatility. As a new contribution, a managerial flexibility domain map is proposed in this paper. Thus, flexibility in mining operations creates agility, increases value and mitigates financial losses. [ABSTRACT FROM AUTHOR]

One of the main barriers to the development of energy efficiency (EE) projects in Brazil is the decision-makers' lack of knowledge about the risks of the projects. The Brazilian Government's Procedures of Energy Efficiency Program (PROPEE) is currently one of the main sources of funding for energy efficiency (EE) projects. The method for evaluating the technical and economic feasibility of projects presented in PROPEE applies the traditional discounted cash flow (DCF) methodology to calculate the net present value (NPV). The energy price used in this model is a fixed value calculated through the postponement of investments (cost of avoided demand) and/or reduction of operating expenses (avoided energy cost). The avoided costs for a given voltage level are incurred throughout the power system, upstream of the consumption unit (view of the electrical system's operator). The PROPEE's methodology, applied on a large scale in Brazil, does not consider some technical uncertainties present in EE projects, nor the market uncertainty regarding the fluctuation of the energy price paid by the consumer units. This paper evaluates the investment risk of EE projects (consumer's perspective) adopted by the Brazilian market, taking as example a large electricity consumer. A methodology is proposed, which, considering the technical and economic uncertainties, performs a more comprehensive and realistic analysis of the complex business scenario involving the EE projects. This case study considered the data collected by a team of independent engineers, for the first time in January 2009 and updated in January 2015, to assess the energy efficiency potential of a commercial consumer unit installed in the city of Rio de Janeiro and connected to the grid of local distribution level voltage 13.8 kV. This study demonstrates a model that made the risk management projects viable in energy efficiency demand-side management (DSM). However, it could also be applied in other markets as well. Understanding how the uncertainties affect decision-making in EE projects is essential for developing a more comprehensive outlook on constructive and regulatory perspective, contributing to the promotion of energy efficiency projects. [ABSTRACT FROM AUTHOR]

The strong fluctuation of price makes investment decision difficult, especially smallholder rubber plantation that depend solely on rubber production to support their livelihood. An investment analysis of the rubber production was needed to complete the study, so a discounted cash flow (DCF) was introduced to account for this study. The findings of the study illustrate that the investment of rubber seemingly economically feasible. However, the result from the Discounted Cash Flow Analysis showed that the time to recover the initial investment on the rubber plantation is getting longer at the current price of rubber. The payback period will be 11.9 years for small size producers. For medium size plantations, the payback period was estimated to be 12.2, 10.5 and 9.8 years in MI, MII and MIII, respectively. The further findings also suggest that small size producers have less choice in term of output produce that they want to put out in the market. [ABSTRACT FROM AUTHOR]

Recently, market globalization and competition have forced companies to find alternative means to boost sales and revenue. The use of the cash flow is increasingly becoming a viable alternative for managers to improve their company's profitability in a supply chain. In today's business transactions, a supplier usually asks a manufacturer to pay via the advance-cash-credit (ACC) payment scheme if the number of goods procured is high. Additionally, product perishability has been considered in an economic production quantity (EPQ) model since it is a real phenomenon. The present work develops an EPQ model for perishable products under the ACC payment scheme. The objective of the proposed model is to determine the optimal selling price and cycle time while maximizing profit under the ACC payment scheme using a discounted cash flow analysis. A nonlinear optimization algorithm is also proposed to solve the problem. In addition, some numerical examples are employed to illustrate the solution approach and show the concavity of the present value of the total annual profit in terms of both selling price and cycle time. The numerical results show that our proposal algorithm could be applied well to solve the problems. In addition, a sensitivity analysis is conducted to obtain some managerial insights. For example, if the impact of advance payment on procurement cost is relatively smaller than that of cash payment, then it is more profitable for the manufacturer to ask for a cash payment than to receive an advance payment and vice versa. [ABSTRACT FROM AUTHOR]

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Goal: This study aims to assess the impact of using the method of real options in investment analysis through a case study on a retail firm. Design / Methodology / Approach: It was targeted the applications of the real options method in a different type of environment and it was compared to another method more commonly used, the discounted cash flow method (DCF). The implementation and assessment of the real options method was investigated by means of a case study conducted in an investment analysis in a retail units firm. Results: The use of the real options method showed a more concise applicability over the DCF method. The results show that the project’s value, after the inclusion of managerial flexibility, increased significantly, which indicates that the analysis of the discounted cash flow undervalued the investment in question, since it disregarded the flexibility to expand or abandon the project. Limitations of the investigation: The presented method is proper to long-term processes where it is possible to make changes during the project. Investments in this sector usually are more related to short and medium-term decisions, making the application difficult due to the short decision-making period available to the managers. Practical Implications: The study provided the incorporation of flexibility through different pathways during the building project in a retail units firm. It was showed different scenarios where practitioners could decide among expanding, proceeding, reducing or abandoning the retail units based on the characteristics of their investments. Originality/value: The results obtained are an indication of this methodology to industrial businesses that are relatively volatile and that need a certain degree of flexibility in order to burgeon, such as the case of the retailing sector. [ABSTRACT FROM AUTHOR]

Stochastic optimisation provides a framework that is capable of generating a strategic life-of-mine production schedule that increases net present value while simultaneously reducing the risk associated with geological uncertainty. This paper focuses on the application of the stochastic strategic mine planning for technical risk management in the KéMag iron ore deposit in Quebec, Canada, demonstrating the key steps of the framework. The approach first quantifies both the volumetric and multi-element grade uncertainty of the deposit by generating a set of equally probable scenarios of the orebody. In this case study, the boundaries of the lithologies (volumetric uncertainty) defining the KéMag iron ore deposit are generated using a pattern-based wavelet simulation algorithm. The pertinent grade properties, namely, head iron, Davis Tube weight recovery, Davis Tube concentrate iron and silica content (multi-element grade uncertainty) are jointly simulated using the direct block minimum/maximum autocorrelation factors algorithm. Subsequently, the simulated scenarios of the iron deposit serve as an input to a life-of-mine stochastic integer programming production-scheduling model. The latter stochastic optimisation model is employed to manage and minimize the risk associated with the geological uncertainty of the deposit in terms of meeting production targets while generating a mining sequence of extraction maximising the net present value. The results of the case study quantify the risk associated with the product's silica content, total iron production and expected discounted annual cash flows. [ABSTRACT FROM AUTHOR]

The paper highlights the role of urban farming in vacant spaces in tertiary institutions, the need to support the local food economy and contribute nutritious and fresh foods to needy students and staff. Materials for the study were gathered through secondary data from journals, books and personal interview which centred on a prepared schedule held with the farm manager of the greenhouse project as well as extensive viability analyses to prove worthwhileness of the project. The study revealed that many backyard farming activities are taking place in vacant spaces in various tertiary institutions by resident and non-resident staff households. The viability techniques of cash flow forecast, profit and loss account and discounted cash flow analyses carried out on the greenhouse project proved its viability as all the analyses gave positive results. For example, the cash flow forecast showed a surplus before tax of N39,394.16 from year 3 and a break even point at year 6 as the accumulated surplus of N275,346.11 surpassed the accumulated deficit of -N223,150.95. The profit and loss account of the project also showed an accrued surplus before tax of N490,969.67 from year 2 while the discounted cash flow analysis showed a net present value (NPV) of +N885,339.91 in life of the project. The paper, therefore, supports the activity as a positive measure in the use of idle spaces in tertiary institutions. It concludes that policies be put in place to officially enumerate and assign vacant spaces for proper farming activities to enhance food security among staff households and students in the tertiary institutions. It recommends that urban farming activities be formally recognized and land devoted for that purpose through policy making, planning and curriculum changes in the various tertiary institutions. [ABSTRACT FROM AUTHOR]

Summary: The aviation industry continues to grow, and consequently, more fuel is needed. With the intention of decarbonising the aviation sector, sustainable routes that have the potential to mitigate emissions, such as biomass fast pyrolysis, can positively contribute to this direction. Within this context, the present study performs a comparative techno‐economic evaluation of aviation biofuel manufacture via the main bio‐oil upgrading pathways, namely, hydroprocessing (HP), gasification followed by Fischer‐Tropsch synthesis (G+FT), and zeolite cracking (ZC). The research constitutes the first endeavour to investigate and compare the feasibility of producing biojet fuel via pyrolysis‐based routes. The presented work provides an inclusive evaluation that comprises process modelling and financial assessment. Based on the simulations, overall energy efficiencies of 48.8%, 45.73%, and 45.38% and jet fuel energy efficiencies of 23.70%, 21.45%, and 20.53% were calculated, while the implementation of a discounted cash flow analysis estimated minimum jet fuel selling prices (MJSPs) of 1.98, 2.32, and 2.21 $/L for the HP, the G+FT, and the ZC, respectively. Sensitivity analysis revealed that the processes are capital and feedstock intensive while an increase to the bio‐oil yield will favour the economic performance of the examined biorefineries. An increase of the plant size from 100 (base case) to 150 dry tonnes per hour of feedstock will decrease the selling prices by approximately 25% for all cases. Monte Carlo simulations exhibited that without establishing and/or maintaining appropriate policy schemes, there is no pragmatic prospect for the examined biorefineries to beat the competition against the prevailing oil infrastructures. [ABSTRACT FROM AUTHOR]

• An economic analysis of a hydrometallurgical processes suitable for Small and Medium Enterprises (SMEs) is presented. • Discounted Cash Flow (DCF) is used as reference methodology and Net Present Value (NPV) is proposed as economic performance index. • The analysis is conducted on three types of WPCBs (high, medium and low grades) and fifteen types of e-wastes. • Results underline the key role of gold and palladium market prices plus the purchase cost of WPCBs. • Sensitivity, scenario and a Break-Even Point (BEP) analyses allowed to identify the exact values where the economic feasibility is verified. In modern society, use of natural resources poses a great challenge. However, the circular economy paradigm has defined a new concept of waste, proposing it as a business opportunity. Of particular interest in this paradigm is 'waste electrical and electronic equipment' (WEEE), given its high growth rate, and 'wasted printed circuit boards' (WPCBs), which are the most valuable component of WEEE. Although WPCB recycling is currently dominated by large firms, the present work evaluates the economic feasibility of hydrometallurgical processes, as used within small and medium enterprises (SMEs). Discounted cash flow (DCF) is used as a reference methodology and net present value (NPV) is used as an economic performance index. The analysis is conducted on three categories of WPCBs (low-, medium- and high-grade) and 15 categories of e-waste. The results underline the key role played by the market price of Au and Pd, plus the purchase cost of WPCBs. Accordingly, sensitivity, scenario and risk analyses are conducted on these variables and a break-even point (BEP) analysis is used to define the exact values for which economic feasibility is verified. NPV is shown to vary from 6.8 million € for medium-grade WPCBs to 63.0 million € for high-grade WPCBs in a baseline scenario, with a negative (unprofitable) result (NPV of -2.8 million €) for low-grade WPCBs. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to present a model to value leveraged firms in the presence of default risk and bankruptcy costs under a flexible firm's debt structure. Design/methodology/approach: The authors assume that the total debt of the firm is a combination of two debt components. The first component is an active debt component which is assumed to be proportional to the firm's value. The second one is a passive predetermined risk-free debt component. The combination of the two debt categories makes the firm's capital structure more realistic and allows us to include flexibility into the firm's debt structure management. The firm's valuation is performed using the discounted cash flow technique based on the weighted average cost of capital (WACC) method. Findings: The model can be used to define active debt management strategies that can induce the firm to deviate from its capital structure target in order to preserve debt capacity for future funding needs. The firm's valuation is performed by using the WACC method and a closed form valuation formula is provided. Such a formula can be used to value costs and benefits of financial flexibility. Research limitations/implications: The proposed approach provides a good compromise between mathematical complexity and model capability of interpreting the various economic and financial aspects involved in the firm's debt structure puzzle. Practical implications: This model offers a realistic approach to practical applications where real financing decisions are characterized by a simultaneous use of these two debt categories. By comparing costs and benefits deriving from using unused debt capacity for future funding needs, the model provides a quantitative support to investigate if financial flexibility can add value to firms. Originality/value: To the authors knowledge, the approach the authors propose is the first attempt to build a valuation scheme that accounts for firm's financial flexibility under default risky debt and bankruptcy costs. Including financial flexibility, this model fills an important gap in the literature on this topic. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to determine the stochastic net present value (NPV) of a model smallholder poultry operation in Rwanda under production and market uncertainty. Design/methodology/approach: A discounted cash flow calculator was used to determine the NPV of operator investments and operating cash flows, including time, materials and capital. Broiler production data, market prices and variable input costs were collected from 125 smallholder operations in the Musanze District, Rwanda. These data were combined with a historical price index tracking the inflation rate of Rwanda's currency. Policies including overstocking, technical support repayment scheduling, selling broilers at a spot market price, using marketing contracts and selling poultry manure were compared using non-parametric paired comparisons and stochastic dominance. Findings: Risk-neutral and risk-averse producers would prefer overstocking, delaying repayment of technical support services and selling manure to status quo operational policy. No differences were observed between the option to sell birds at spot market prices or through contracts. Research limitations/implications: This analysis demonstrates how individual managerial or an intervention in smallholder broiler production affects financial performance. Practical implications: To mitigate risk associated with this novel enterprise, producers should consider overstocking birds. If local markets for manure were developed, the risks faced by new or beginning poultry operators could be mitigated. Originality/value: A stochastic, discounted cash flow model calculator was used to determine the NPV and discounted payback period of operator investments and operating cash flows, including time, materials and capital. [ABSTRACT FROM AUTHOR]