A note on the effect of the discount rate and length of the accounting period on the economic value of genetic improvement in cattle populations

1975 ◽  
Vol 21 (1) ◽  
pp. 77-80 ◽  
Author(s):  
E. P. Cunningham ◽  
Joan Ryan
Keyword(s):  
Gene Flow ◽  
Discount Rate ◽  
Economic Benefit ◽  
Genetic Improvement ◽  
Economic Value ◽  
Discount Rates ◽  
Present Value ◽  
Genetic Merit ◽  
Flow Method ◽  
Accounting Period

SUMMARYThe discounted gene flow method was used to study the effect of varying financial discount rates and accounting period on the present value of the genetic merit conferred by each insemination.Over the range from 8% to 16%, each 1% increase in the discount rate reduces the value of the dairy and beef consequences of an insemination by about 5% and 4% respectively, Virtually all of the economic benefit arising from an insemination is complete within 20 years, with about 90% of it being realized in the first 10 years and 98% in the first 15 years.

High Discounts and High Unemployment

2017 ◽  
Vol 107 (2) ◽  
pp. 305-330 ◽  
Author(s):  
Robert E. Hall
Keyword(s):  
Labor Market ◽  
Stock Market ◽  
Discount Rate ◽  
Job Creation ◽  
Discount Rates ◽  
Present Value ◽  
High Unemployment ◽  
Business Income ◽  
New Hire

Unemployment is high when financial discounts are high. In recessions, the stock market falls and all types of investment fall, including employers' investment in job creation. The discount rate implicit in the stock market rises, and discounts for other claims on business income also rise. A higher discount implies a lower present value of the benefit of a new hire to an employer. According to the leading view of unemployment—the Diamond-Mortensen-Pissarides model—when the incentive for job creation falls, the labor market slackens and unemployment rises. Thus high discount rates imply high unemployment. (JEL E24, E32, E44, J23, J31, J63)

Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries

Policy Papers ◽  
2013 ◽  
Vol 2013 (26) ◽  
Author(s):  
Keyword(s):  
Discount Rate ◽  
Low Income ◽  
External Debt ◽  
Low Income Countries ◽  
Discount Rates ◽  
Present Value ◽  
Debt Sustainability ◽  
Joint Product

This paper proposes reforms to the discount rates used by the Bank and the Fund to (a) calculate the present value (PV) of the external debt of low-income countries (LICs) in debt sustainability analyses (DSAs) and (b) to calculate the grant element of individual loans. Consistent with the conclusions of the March 2013 review of the Fund’s debt limits policy, the paper proposes a single uniform discount rate to be used for these related operational purposes. It has been prepared as a joint product of Bank and Fund staff, with the exception of the decision, which is Fund-specific.

Optimum selection intensity in breeding programmes

1972 ◽  
Vol 14 (1) ◽  
pp. 1-9 ◽  
Author(s):  
J. W. James
Keyword(s):  
Discount Rate ◽  
Genetic Improvement ◽  
Selection Intensity ◽  
Present Value ◽  
Closed Population ◽  
Population Mean ◽  
Numerical Example ◽  
Optimum Selection ◽  
Breeding Programmes

SUMMARYThe present value of future genetic improvement in a closed population is taken to be proportional to the sum of discounted changes in the population mean. It is shown that, if T animals are available for selection and R is the discount rate per generation, the selection intensity which maximizes present value is a function of TR. If TR is greater than 15, under 10% of the population should be selected. It is then shown how T can be chosen to maximize profit if the value of genetic improvement and cost of testing are known. The theory is illustrated by a numerical example.

Global Conclusion

2012 ◽  
Author(s):  
Christian Gollier
Keyword(s):  
Decision Rule ◽  
Term Structure ◽  
Discount Rate ◽  
Net Present Value ◽  
Cash Flows ◽  
Future Generations ◽  
Discount Rates ◽  
Present Value ◽  
Basic Principles ◽  
Key Parameter

This concluding chapter summarizes the principles set forth in this volume. It argues that the discount rate is a key parameter in economics because it determines how our societies value their future. The chapter aims to use the discount rate in the net present value (NPV) decision rule: to find the discount rate which gives a positive NPV only for those projects that raise the sum of present and future generations’ felicity. In that light, this chapter briefly touches upon the basic principles of discounting, the discounting of safe real cash flows, the term structure of real discount rates, the evaluation of uncertain projects, and the adaptability of projects.

The Valuation Relevance of Reversing Deferred Tax Liabilities

2004 ◽  
Vol 79 (2) ◽  
pp. 437-451 ◽  
Author(s):  
David A. Guenther ◽  
Richard C. Sansing
Keyword(s):  
Discount Rate ◽  
Firm Value ◽  
Market Value ◽  
Present Value ◽  
Depreciation Rate ◽  
The Future ◽  
Deferred Tax Liabilities ◽  
Deferred Tax ◽  
Tax Depreciation ◽  
Depreciation Methods

This paper compares two attributes of a deferred tax liability (DTL) that arise from differences in book and tax depreciation methods. The first attribute is the effect of the DTL on the market value of the firm. The second is the length of time between when the asset is placed into service and when the DTL associated with that asset begins to reverse. The paper shows that a decrease in the time it takes for the DTL to begin to reverse is neither necessary nor sufficient for the value of the DTL to increase. It also shows that the value of the DTL is not equal to the present value of the future deferred tax expense. The effect of one dollar of DTL on firm value depends only on the tax depreciation rate and the discount rate.

scholarly journals A Scorecard to Detect Financial Leverage Profitability

2018 ◽  
Vol 13 (3) ◽  
pp. 244
Author(s):  
Laura Broccardo ◽  
Luisa Tibiletti ◽  
Pertti Vilpas
Keyword(s):  
Net Present Value ◽  
Economic Value ◽  
Weighted Average ◽  
Cost Of Debt ◽  
Corporate Management ◽  
External Financing ◽  
Present Value ◽  
Financial Decisions ◽  
Proposed Model ◽  
The Cost

This study investigates how balancing internal and external financing sources can create economic value. We set a financial scorecard, consisting of the Cost of Debt (COD), Return on Investment (ROI), and the Cost of Equity (COE). We show that COE should be a cap for COD and a floor for ROI in order to increase the Net Present Value at Weighted Average Cost of Capital and the Adjusted Present Value of the levered investment. However, leverage should be carefully monitored if COD and ROI go off the grid. Situations where leverage has the opposite effect on value creation and the Equity Internal Rate of Return are also discussed. Illustrative examples are given. The proposed model aims to help corporate management in financial decisions.

scholarly journals Estimation of the Value of Ecosystem Carbon Sequestration Services under Different Scenarios in the Central China (the Qinling-Daba Mountain Area)

2019 ◽  
Vol 12 (1) ◽  
pp. 337 ◽  
Author(s):  
Yuyang Yu ◽  
Jing Li ◽  
Zixiang Zhou ◽  
Li Zeng ◽  
Cheng Zhang
Keyword(s):  
Carbon Sequestration ◽  
Organic Carbon ◽  
Soil Organic Carbon ◽  
Soil Carbon ◽  
Carbon Storage ◽  
Discount Rate ◽  
Net Present Value ◽  
Carbon Price ◽  
Present Value ◽  
Mountain Area

The Qinling-Daba Mountain area is a transitional zone between north and south China and not much is known about its carbon storage, particularly its pool of soil organic carbon (SOC). Given this shortcoming, more reliable information regarding its SOC is needed. In light of this, we quantified above and below-ground carbon sinks using both the Carnegie-Ames-Stanford approach (CASA) model and an improved carbon cycle process model. We also assessed the net present value (NPV) for carbon budgets under different carbon price and discount rate scenarios using the NPV model. Our results indicated that the net primary productivity (NPP) was lower in places with low density forests that were situated at high elevation. The spatial distribution of carbon storage depended on NPP production and litter decompositon, which reflected specific vegetation as well as temperature and moisture gradients. The lowest amounts of carbon storage were in the center of the Qinling Mountains and also partly in the Daba area, which is a location associated with sparse grassland. Contrastingly, the broad-leaved forested area showed the highest amount of carbon storage. NPV was positively correlated with discount rate and carbon prices, thus resulting in the highest values in the forests and grassland. The net present value of total soil carbon sequestration in the six scenarios in 2015 was 3.555 b yuan, 3.621 b yuan, 5.421 b yuan, 5.579 b yuan, 7.530 b yuan, 7.929 b yuan; The net present value of total soil carbon sequestration in 6 scenarios in 2017 is 2.816 b yuan, 2.845 b yuan, 4.361 b yuan, 4.468 b yuan, 6.144 b yuan, 6.338 b yuan (billion = 109; b; RMB is the legal currency of the China, and its unit is yuan, 1 euro = 7.7949 yuan, and 1 pound = 9.2590 yuan). Levying a carbon tax would be a notable option for decision makers as they develop carbon emission reduction policies. Given this, incorporating discount rates and carbon pricing would allow for more realistic value estimations of soil organic carbon. This approach would also provide a theoretical basis and underscore the practical significance for the government to set a reasonable carbon price.

scholarly journals Estimating the aboveground carbon sequestration and its economic value (case study: Iranian Caspian forests)

2017 ◽  
Vol 63 (No. 11) ◽  
pp. 511-518 ◽  
Author(s):  
Mohammadi Zohreh ◽  
Limaei Soleiman Mohammadi ◽  
Lohmander Peter ◽  
Olsson Leif
Keyword(s):  
Carbon Sequestration ◽  
Net Present Value ◽  
Economic Value ◽  
Volume Growth ◽  
Allometric Equation ◽  
Present Value ◽  
Diameter Increment ◽  
Aboveground Carbon ◽  
The North ◽  
Annual Volume

The aim of the study is to estimate the aboveground carbon sequestration and to determine the economic value of forests in carbon sequestration as a way of mitigating climate change. This research was conducted at Asalem forests in the north of Iran. In order to estimate the amount of annual carbon sequestration, the annual volume growth of stand was determined using the diameter increment data and tariff. The amount of carbon sequestration was estimated based on wood density and using the allometric equation. The carbon model was obtained for each species. The value of sequestrated carbon in stumpage and the net present value of carbon sequestration were determined in order to estimate the economic value of carbon sequestration. Results indicated that the annual volume growth per hectare and the carbon stored are 6.023 m<sup>3</sup>·yr<sup>–1</sup> and 2.307 t·ha<sup>–1</sup>, respectively. Finally, the carbon sequestration value of stumpage and the net present value of carbon sequestration are 11,023.753 and 790.361 (10,000 IRR·t<sup>–1</sup>·ha<sup>–1</sup>), respectively. Our results are very useful in estimating the total economic value of Asalem forests and other Iranian Caspian forests in the future.

scholarly journals Cost-Effectiveness of Pediatric Cancer Treatment in Tanzania: An Economic Analysis

2017 ◽  
Vol 3 (2_suppl) ◽  
pp. 33s-33s ◽  
Author(s):  
Anthony T. Saxton ◽  
Manisha Bhattacharya ◽  
Nestory Masalu ◽  
Henry E. Rice ◽  
Kristin Schroeder
Keyword(s):  
Cost Effectiveness ◽  
Cancer Treatment ◽  
Pediatric Cancer ◽  
Economic Benefit ◽  
Hospital Admissions ◽  
Conflicts Of Interest ◽  
Medical Center ◽  
Economic Value ◽  
Retrospective Chart Review ◽  
Cost Effectiveness Ratio

Abstract 52 Background: Despite the high burden of pediatric cancer in low- and middle-income countries, the number of facilities at which children can obtain treatment remains distressingly low. Understanding the costs and economic value of pediatric cancer treatment may assist policy makers to maximize the value of investments in health with informed resource allocation decisions. We examined the direct and indirect costs, cost-effectiveness, and societal economic benefit of diagnosing and treating children with cancer in Tanzania at the Bugando Medical Center, one of only two hospitals in the country with a pediatric oncology unit. Methods: A retrospective chart review of hospital admissions and clinic visits from January 2010 to August 2014 was performed. Costs were recorded for all items that were billed to the patient for laboratory studies, medications, imaging, pathology, surgeries, and hospital stay. Travel costs were estimated for each patient on the basis of a self-reported home address. All costs were converted from Tanzanian shillings to 2016 US dollars. Health outcomes were measured as disability-adjusted life-year (DALY) averted. We calculated the cost-effectiveness ratio of treatment versus performing no intervention as well as the societal economic benefit using a human capital approach and considering the per capita gross national product in Tanzania. Results: We identified costs for a subset of 127 patients, 64% of which were male (n = 81). Mean age at first clinical presentation was 6.9 years. Mean cost for treatment was $218 ± $145, with an average of 10.4 ± 8.9 DALYs averted per patient. Total cost-effectiveness ratio was $21/DALY, and the mean societal economic benefit was $27,118 ± $23,412. Conclusion: Our findings show that pediatric cancer treatment in Tanzania is cost-effective and offers substantial economic value. AUTHORS' DISCLOSURES OF POTENTIAL CONFLICTS OF INTEREST No COIs from the authors.

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