It is essentially acknowledged that discounted cash flows should always be calculated by management when making long-term investment decisions. Why is this so?

2021 ◽  
Vol 9 (3) ◽  
pp. 84-98
Author(s):  
Francis Kwadade-Cudjoe
Keyword(s):  
Competitive Advantage ◽  
Competitive Strategy ◽  
Investment Decisions ◽  
Cash Flows ◽  
Venture Capitalists ◽  
Cheap Labour ◽  
Fixed Assets ◽  
Goals And Objectives

Investment is sacrifices made now / future in anticipation of upcoming benefits. Long-term investment is the act of using money to acquire items, normally fixed assets, and is a pre-requisite for any modern organization to have them. Organizations are looking for capital to expand their frontiers to capture cheap labour for manufacturing their products, i.e. globalization. The struggle for survival of organizations, therefore hinge precariously on the ability of the enterprise to successfully invest in long-term debts, and managing the resource judiciously to thrive. However, banks and venture capitalists are not ready to contract loans to organizations not competitive. Moreover, the surge of covid-19 pandemic has made the situation dire, as there is no particular haven to fall on. In view of this, discounting the cash flows generated from business activities is perfectly right to accurately account for success of organizations. Non-discounting cash flows generated from business activities is not rigorous to properly account for success of organizations. In addition, the competitive strategy adopted by the organization is vital to enable management achieve its goals and objectives, and subsequently attain competitive advantage. Furthermore, it is paramount for the organization’s competitive advantage so achieved to be sustainable.

scholarly journals Possibilities of Application of Static Investment Appraisal Methods for Optimizing Purchase under Conditions of Mine Rescue Service

2014 ◽  
Vol 60 (1) ◽  
pp. 35-44
Author(s):  
Jana Magnusková ◽  
Zdeněk Pavelek ◽  
Lucie Krčmarská
Keyword(s):  
Price Level ◽  
Investment Decisions ◽  
Investment Project ◽  
Optimal Price ◽  
Rescue Service ◽  
Specific Investment ◽  
Investment Appraisal ◽  
Long Term Effect ◽  
Fixed Assets

Abstract The present article focuses on the importance of making investment decisions and its long-term effect on the economy of companies. It presents a specific investment in the recovery of rescue equipment used for interventions in the irrespirable or deleterious environment on an example of the company HBZS, a.s. The objective is to evaluate the effectiveness of the investment project using static methods in relation to setting an optimal price level for leasing the equipment. The optimization of such setting is examined in terms of the economic lifetime of relevant tangible fixed assets

scholarly journals Implications of Cash Flows and Investment Opportunity for Investment Decisions in Fixed Assets on Financially Constrained Companies

2020 ◽  
Vol 8 (1) ◽  
pp. 69-75
Author(s):  
Citra Veronisa
Keyword(s):  
Cash Flow ◽  
Financial Constraints ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Cash Flows ◽  
Investment Opportunity ◽  
Fixed Assets ◽  
Investment Opportunities ◽  
Conceptual Paper ◽  
Intervening Variables

This research is a conceptual paper that aims to determine the effect of cash flow and investment opportunity for investment decisions in fixed assets on financially constrained companies. This type of research is explanatory research with companies in the property and real estate sectors listed on the Indonesia Stock Exchange in 2016-2018 as a population.This research will be conducted to predict how much the level of investment decisions is influenced by cash flow and investment opportunities with financial constraints as intervening variables. Based on previous research, shows differences in research results, so the authors aim to see the results of research on companies in Indonesia with different conditions and measurement variables.

Promoting organizational success with effective competitive strategy: Examination and analysis of competitive strategies of IBM and DELL within the IT Industry

2020 ◽  
Vol 8 (8) ◽  
pp. 306-320
Author(s):  
Francis Kwadade-Cudjoe
Keyword(s):  
Competitive Advantage ◽  
Competitive Strategy ◽  
Organizational Success ◽  
Effective Strategy ◽  
Competitive Strategies ◽  
It Industry ◽  
Modus Operandi ◽  
Cost Leadership ◽  
Effective Strategies ◽  
Goals And Objectives

Achieving organizational success has always been the bane of businesses, but it is an important requirement for every business. The best approach to achieving this success is to develop a good and effective strategy; the modus operandi for organizational success to achieving competitive advantage. Most organizations work tirelessly to establish strategies to enable the achievement of goals and objectives, but understanding what entails in establishing effective strategies has never been easy. However, once the resources of the organization are identified, and putting together concrete activities to perform on the resources, an effective competitive strategy could be established, which should lead to competitive advantage. Sustaining an organizational competitive advantage is very necessary, so as to create an enabling environment for sustainability, and in addition profitability, whilst pursuing its functions. Fact is, a lot of capital is always expended before a business is founded, and this investment cannot be squandered, but be recouped. Therefore, structuring an effective competitive strategy at the very beginning, is a must for every organization. The generic competitive strategies are cost leadership, differentiation and niche / focus.

scholarly journals Fixed Investments and Macroeconomic Agent-Based Modeling

2021 ◽  
Vol 21 (1) ◽  
pp. 5-28
Author(s):  
Alexander A. Tsyplakov ◽  
Larisa V. Melnikova
Keyword(s):  
Technical Progress ◽  
Investment Decisions ◽  
Cash Flows ◽  
Input Output ◽  
Agent Based ◽  
Economic Agents ◽  
Agent Interaction ◽  
Investment In Fixed Assets ◽  
Investment Process

The significant progress observed in the field of artificial economy opens up new possibilities for modeling economic growth. Agent-based models (ABM) allow leaving the concept of a representative agent in the past and linking investment decisions of economic agents at the micro level with long-term macroeconomic growth. Modern ABMs offer new algorithms for modeling expectations, agent interaction, technical progress, pricing, and production planning. Our article analyzes the current state of modeling investment in fixed assets in operating macroeconomic ABMs. The subject of the review is the families of models Eurace, CATS, KS, Jamel, Lagom. The authors also present the investment block of the agent-based multiregional input-output model (ABMIOM) being developed. Comparative analysis demonstrates that modern ABMs, as a rule, implement the principle of stock-flow consistency. Modeling the investment process requires detailing the commodity nomenclature, so that the initially adopted two-sector division into investment and consumer goods is replaced by more detailed structures, which gives rise to the problem of accounting for inter-sectoral relations in production and consumption. The Leontief production function copes with this problem, which is confirmed by its widespread use in ABM. The size of firms' investments is often derived from the need to expand capacity in accordance with the current production plan, so that planning turns out to be myopic, and long-term aspects in ABM are still largely unrealized. Nevertheless, already now ABMs reproduce many phenomena associated with the economic cycle. The developed ABMIOM provides horizontal consistency of cash flows between agents and analysis of results using input-output tables. ABMIOM represents a step forward in reflecting intersectoral and interregional flows. The model reproduces the growth and contraction of the economy as a result of independent investment decisions of individual firms and households, which is reflected in the sectoral and spatial structure of the economy. Further development of ABMIOM is associated with the modeling of savings, intrafirm finance, money market, innovation and technical progress.

scholarly journals Migrant Labour during the Pandemic: A Political Economy Perspective

2021 ◽  
pp. 001946622110212
Author(s):  
Deepak K. Mishra
Keyword(s):  
Political Economy ◽  
Migrant Workers ◽  
Labour Force ◽  
Current Crisis ◽  
Capitalist Development ◽  
Working Classes ◽  
Migrant Labour ◽  
Cheap Labour ◽  
The One

This article aims to analyse the plight of the migrant workers in India during the Covid 19 pandemic from a political economy perspective. While taking note of the disruptions and uncertainties during the drastic lockdown that was announced suddenly, it is argued that the vulnerabilities of the migrant labour force are deeply embedded in the long-term changes in the political economy of development in India. These changes, on the one hand, have resulted in the gradual weakening of state support to the working classes, and on the other, have resulted in the normalisation of ‘cheap labour’ as a legitimate objective of neoliberal capitalist development. Locating the conditions of the migrant working class on the specificities of the manifold restructuring of the Indian economy under neoliberal globalisation, the study attempts to emphasise the structural dimensions of the current crisis faced by the migrant labourers. JEL Codes: J46, J61, O15, O17, P16

scholarly journals Sustainable Investments in Responsible SMEs: That’s What’s Distinguish Government VCs from Private VCs

2021 ◽  
Vol 14 (1) ◽  
pp. 25
Author(s):  
Jeaneth Johansson ◽  
Malin Malmström ◽  
Joakim Wincent
Keyword(s):  
Decision Making ◽  
Investment Decisions ◽  
Societal Impact ◽  
Venture Capitalists ◽  
Decision Making Processes ◽  
Micro Level ◽  
Sustainable Investments ◽  
Private Venture ◽  
The Impact ◽  
Level Performance

Researchers question the impact of governmental venture capitalists (GVC) compared to private venture capitalists (PVC), but we know little about why this difference occurs and if this criticism is justified. We observed a group of GVCs and developed a new model that describes the way that GVCs process signals pre- and post-decisions. Certain macro level factors severely undermine micro level performance, causing GVCs to financially underperform with respect to PVCs. This helped us to understand that GVCs do not make investment decisions in the same way as PVCs, and what undermines the performance of GVCs’ decision-making processes. The main goals of GVCs are to promote investments in responsible SMEs, mobilizing societal impact. We discuss that the criticism of GVC needs to be more nuanced, as they have a different role than PVC in the financial system as providers of sustainable investments in responsible SMEs.

Where Did All the Dollars Go? The Effect of Cash Flows on Capital and Asset Structure

2011 ◽  
Vol 46 (5) ◽  
pp. 1259-1294 ◽  
Author(s):  
Sudipto Dasgupta ◽  
Thomas H. Noe ◽  
Zhen Wang
Keyword(s):  
Cash Flow ◽  
Economic Effect ◽  
Balance Sheet ◽  
Cash Flows ◽  
Long Run ◽  
Goods Market ◽  
Short Run ◽  
Debt Market ◽  
Short And Long Term

AbstractThis paper documents the short- and long-term balance sheet effect of cash flows. We show that cash savings in the short run and debt reduction in both the short and the long run account for a substantial fraction of cash flow use. Although, in the long run, investment exhibits substantial sensitivity to cash flows, investment does not absorb the entire cash flow shock. In fact, the tighter the financial constraints, the smaller the fraction of cash flow absorbed by investment and the more by leverage reduction. Firms stage their response to increases in cash flow, delaying investment while building up cash stocks and reducing leverage. These results suggest that much of the short-run economic effect of cash flow shocks to the corporate sector may be channeled into the corporate debt market rather than the capital goods market, especially when financing constraints tighten.

RETAILER’S SLOGAN IN THE FUNCTION OF PRICE IMAGE

2021 ◽  
Author(s):  
Jelena Franjković ◽  
Keyword(s):  
Competitive Advantage ◽  
Significant Role ◽  
Price Level ◽  
Marketing Mix ◽  
Consumer Perception ◽  
Successful Management ◽  
High Turnover ◽  
And Control ◽  
Price Image

The image of the retail brand and the price image of the retailer are of significant importance for achieving a competitive advantage and long-term strengthening of the overall image. Retailers’ slogans should reflect their overall strategy and facilitate and consolidate the desired positioning in the minds of customers, ie consumers. The paper studies retailers with predominantly food products, i.e., high-turnover products. Retailers who sell products of different brands find it more difficult to manage and control the positioning of their brand, and the price image also plays a significant role in this. This paper aims to investigate and compare consumer perception of retailers’ slogans and their price image. A primary survey was conducted with persons participating in the purchase of groceries for their household and included the top five retailers in the Croatian market. The results showed that the slogan of retailers can play an important role in the successful management of the price image. The compliance of the perception of the price image of retailers by the respondents with the associations of their slogans to the price level was noted. Finally, it is concluded that the harmonization of all elements of the retail marketing mix facilitates and strengthens the desired positioning in the minds of consumers, and thus the price image.

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