Uncertainty and Investment Choice in a Real-Options Model of the Firm

10.26686/wgtn.17065433 ◽

2021 ◽

Author(s):

◽

Cameron Hobbs

Keyword(s):

Real Option ◽

Investment Policy ◽

The Other ◽

Optimal Decision ◽

High Yield ◽

Investment Opportunity ◽

Financial Condition ◽

Project Model ◽

Optimal Decision Making ◽

Cash Reserves

<p>A firm must consider many factors when adopting an investment policy including, but not limited to the size, scope, and cost of each investment, as well as the firm's financial condition. The multitude of considerations makes optimal decision-making much more complex than is indicated by standard real-option models of investment. This thesis investigates the behaviour of a cash-constrained firm that has access to two distinct investment opportunities. Such a firm must not only choose the timing of each investment, but often it must also choose between investments. When compared with similar one-project models of the past, the introduction of an additional investment opportunity alters the general results in a variety of ways. If one of the projects has a high yield, and therefore a quick payback period, this project can provide benefits over and above its NPV as the cash it generates relaxes future capital constraints for follow-up investment. When the firm is sufficiently constrained, this can lead to an investment policy where high-yield low-NPV projects are implemented instead of lower-yield higher-NPV projects, a direct deviation from the NPV rule. If one of the projects can raise a relatively large proportion of its value as collateral for investment, then the constrained firm will at times accelerate investment in this project in order to free up cash reserves for the other opportunity. In single-project models, when the firm is able to invest in a low NPV project, the value of additional cash is low. This is because the project will be delayed regardless of the level of cash. However, when the firm has a second investment opportunity, if one project has a low NPV and the other a high NPV then additional cash is beneficial to the firm. The two-project model also provides insights into how resources should be allocated if the constrained firm decides to split and operate the projects as separate firms. When cash is low, more resources should go to the spin-off with the high NPV project in order to give it the best chance of being initiated. However, when cash is high, disproportionately more resources should go to the spin-off with the lower NPV project as investment in the higher NPV project is likely to occur without the help of additional resources.</p>

Download Full-text

¿ Caminamos hacia el manejo del videolaringoscopio como primera opción en una vía aérea difícil?

Revista Electrónica AnestesiaR ◽

10.30445/rear.v12i7.821 ◽

2020 ◽

Vol 12 (7) ◽

pp. 1

Author(s):

Juan José Correa Barrera ◽

Mónica San Juan Álvarez ◽

Blanca Gómez Del Pulgar Vázquez ◽

Gholamian Ovejero Soraya

Keyword(s):

Decision Making ◽

Tracheal Intubation ◽

Airway Management ◽

Difficult Airway ◽

The Other ◽

Optimal Decision ◽

Difficult Airway Management ◽

Toma De Decisiones ◽

Failed Airway ◽

Optimal Decision Making

Determinar los factores predictivos de una vía aérea difícil constituye un reto para el médico anestesiólogo. La mayoría de guías actuales, sitúan los videolaringoscopios como elementos de rescate de una vía aérea fallida, tras una laringoscopia tradicional óptima. Establecer un algoritmo que en base a unas características físicas, permita determinar qué pacientes se beneficiarán del uso del videolaringoscopio como primera opción, puede suponer una ventaja y una disminución en los problemas relacionados con la vía aérea. Por otra parte, establecer cuáles de estos factores predicen con más fuerza una dificultad con el videolaringoscopio, nos ayudará a realizar mejores planes de abordaje y una óptima toma de decisiones sobre una vía aérea difícil. Este algoritmo ha sido capaz de conseguir la intubación traqueal de todos los pacientes en los que se ha previsto una laringoscopia difícil. ABSTRACT Moving towards videolaryngoscopy handling as first option in difficult airway management? Determining the predictors of a difficult airway is a challenge for the anesthesiologist. Most current guides place videolaryngoscopes as recue elements of a failed airway, after an optimal traditional laryngoscopy. Establishing an algorithm which, based on physical charcteristics, allows to determine which patients will benefit from the use of videolaryngoscopy as a first option, may lead to a potential advantage and a net decrease in airway related problems. On the other hand, establishing which of those factors predict in a more reliable way a difficulty with the videolaryngoscopy, will contribute to make better plans of approach as well as an optimal decision making on a difficult airway. This algorithm has been able to achieve tracheal intubation of all patients for which a difficult laryngoscopy is expected.

Download Full-text

A GAME MODEL OF IRREVERSIBLE INVESTMENT UNDER UNCERTAINTY

International Game Theory Review ◽

10.1142/s0219198902000604 ◽

2002 ◽

Vol 04 (02) ◽

pp. 127-140 ◽

Cited By ~ 15

Author(s):

PAULI MURTO ◽

JUSSI KEPPO

Keyword(s):

Game Theory ◽

Brownian Motion ◽

The Other ◽

Optimal Decision ◽

Game Model ◽

Investment Opportunity ◽

Irreversible Investment ◽

Investment Under Uncertainty ◽

Investment Opportunities ◽

Telecommunications Network

Most of the literature on real options considers the optimal decision of a firm in isolation from competitors. In reality, however, the actions of competing firms often affect each other's investment opportunities. We develop a game model where many firms compete for a single investment opportunity. When one of the firms triggers the investment the opportunity is completely lost for the other firms. The value of the project for the firms is assumed to follow a geometric Brownian motion. The model combines game theory and the theory of irreversible investment under uncertainty. We characterize the resulting Nash equilibrium under different assumptions on the information that the firms have about each other's valuations for the project. As an example, we present a case of building a telecommunications network.

Download Full-text

OPTIMAL DECISION MAKING WHEN PLANNING MOBILE COMMUNICATION NETWORKS TAKING INTO ACCOUNT A SET OF QUALITY FACTORS

Telecommunications and Radio Engineering ◽

10.1615/telecomradeng.v74.i18.40 ◽

2015 ◽

Vol 74 (18) ◽

pp. 1635-1649

Author(s):

V. M. Bezruk ◽

D. V. Chebotaryova

Keyword(s):

Decision Making ◽

Communication Networks ◽

Mobile Communication ◽

Optimal Decision ◽

Quality Factors ◽

Mobile Communication Networks ◽

Optimal Decision Making

Download Full-text

Using Low Temperature, Cost-effective and Green Methods to Carbon Nanohorn Synthesis

Nanoscience &Nanotechnology-Asia ◽

10.2174/2210681208666180321143945 ◽

2019 ◽

Vol 9 (2) ◽

pp. 157-160

Author(s):

Ali Hasani

Keyword(s):

Laser Ablation ◽

Melting Point ◽

Palm Olein ◽

Arc Discharge ◽

Low Cost ◽

The Other ◽

High Yield ◽

Reaction Field ◽

Carbon Nanohorns ◽

Graphite Rod

Background: Laser ablation method has high-yield and pure SWCNHs. On the other hand, arc discharge methods have low-cost production of SWCNHs. However, these techniques have more desirable features, they need special expertness to use high power laser or high current discharge that either of them produces very high temperature. As for the researches, the temperatures of these techniques are higher than 4727°C to vaporize the graphite. So, to become aware of the advantages of SWCNHs, it is necessary to find a new way to synthesize SWCNHs at a lower temperature. In other words, reaction field can be expandable at a moderate temperature. This paper reports a new way to synthesize SWCNHs at an extremely reduced temperature. Methods: According to this study, the role of N2 is the protection of the copper holder supporting the graphite rod by increasing heat transfer from the holder. After the current of 70 A was supplied to the system, the temperature of graphite rod was raised to 1600°C. It is obvious that this temperature is somehow higher than the melting point of palladium, 1555°C, and much lower than graphite melting point, 3497°C. Results: Based on the results, there are transitional precursors simultaneous with the SWCNHs. This composition can be created by distortion of the primary SWCNTs at the higher temperature. Subsequently, each SWCNTs have a tendency to be broken into individual horns. With increasing the concentration of the free horns, bud-like SWCNHs can be produced. Moreover, there are individual horns almost separated from the mass of single wall carbon nanohorns. This structure is not common in SWCNHs synthesized by the usual method such as arc discharge or laser ablation. Through these regular techniques, SWCNHs are synthesized as cumulative particles with diameters about 30-150 nm. Conclusion: A simple heating is needed for SWCNTs transformation to SWCNHs with the presence of palladium as catalyst. The well-thought-out mechanism for this transformation is that SWCNTs were initially changed to highly curled shape, and after that were formed into small independent horns. The other rout to synthesize SWCNHs is the pyrolysis of palm olein at 950°C with the assistance of zinc nitrate and ferrocene. Palm olein was used as a promising, bio-renewable and inexpensive carbon source for the production of carbon nanohorns.

Download Full-text