scholarly journals Probabilistic Estimation of the Energy Consumption and Performance of the Lighting Systems of Road Tunnels for Investment Decision Making

Energies ◽  
2019 ◽  
Vol 12 (8) ◽  
pp. 1488 ◽  
Author(s):  
Antonio Bracale ◽  
Pierluigi Caramia ◽  
Pietro Varilone ◽  
Paola Verde
Keyword(s):  
Decision Making ◽  
Business Strategy ◽  
Net Present Value ◽  
Investment Decision ◽  
Final Decision ◽  
Capital Investments ◽  
Technical Performance ◽  
Investment Decision Making ◽  
Road Tunnels ◽  
Lighting Systems

This paper presents a probabilistic model for supporting the process of decision making about the value of new lighting systems in existing road tunnels when some data and parameters are affected by uncertainty. The proposed model, which we have called Probabilistic Energy Screening of Tunnel (PrEST), accounts for both the technical performance and the economic objectives of the new lighting systems. The technical performance is described on an adequate (x, y) plane that was defined by two indices. The first index measured the consumption of electricity per kilometre of tunnel lengths; the second index measured the performance of the lighting systems per unit of illuminated area. The economic results were measured by the net present value of the savings and by the payback period. Both the terms account for initial capital investments, energy and maintenance costs. PrEST was applied to two real road tunnels in service in Italy showing that the statistics of the results can support a final decision in function of the business strategy.

Analytical capacity of financial statements against the backdrop of the COVID-19 pandemic

2020 ◽  
Vol 19 (10) ◽  
pp. 1794-1821 ◽  
Author(s):  
O.V. Efimova ◽  
O.V. Rozhnova
Keyword(s):  
Decision Making ◽  
Financial Performance ◽  
Financial Reporting ◽  
Business Strategy ◽  
Investment Decision ◽  
Financial Statements ◽  
Cash Flows ◽  
Foreign Companies ◽  
Investment Decision Making ◽  
The Impact

Subject. The paper explores the analytical capabilities of information disclosed in financial statements in the context of the COVID-19 pandemic. Objectives. The purpose is to identify the impact of the pandemic on financial statements and their analytical capabilities for investment decision-making. Methods. The study draws on methods of logical, statistical, comparative, and linguistic analysis. We analyze financial statements of Russian and foreign companies, paying special attention to the completeness of disclosed information on the impact of the pandemic on business and financial performance. We review annual financial statements for 2019, and interim reports for 2020. Results. We unveil the areas of disclosures that are most critical for the investment community and investment decision making, and vital for the analysis of financial performance and cash flows, given the unprecedented impact of the COVID-19 pandemic. The findings may be applicable to financial reporting preparation by economic entities in terms of disclosure on various forms of transformation and adaptation of businesses to the new crisis conditions; modernization of accounting rules at the level of external and internal standards in the direction of coordinating financial and non-financial reporting information; enhancement of analytical capacity of disclosures. Conclusions. The study confirms the scientific hypothesis that investors require detailed disclosure in all areas of the pandemic impact. To evaluate the going concern assumption and to forecast cash flows, users need disclosures on business strategy, the business model and its adaptability to the conditions of the new normality, sources of cash flow generation, and their use areas.

scholarly journals A Through-Life Cost Analysis Model to Support Investment Decision-Making in Concentrated Solar Power Projects

Energies ◽  
2020 ◽  
Vol 13 (7) ◽  
pp. 1553 ◽  
Author(s):  
Mahmood Shafiee ◽  
Adel Alghamdi ◽  
Chris Sansom ◽  
Phil Hart ◽  
Adriana Encinas-Oropesa
Keyword(s):  
Decision Making ◽  
Cost Analysis ◽  
Net Present Value ◽  
Solar Power ◽  
Investment Decision ◽  
Energy Output ◽  
Cost Ratio ◽  
Analysis Model ◽  
Concentrated Solar Power ◽  
Investment Decision Making

This research paper aims to propose a through-life cost analysis model for estimating the profitability of renewable concentrated solar power (CSP) technologies. The financial outputs of the model include net present value (NPV) and benefit-cost ratio (BCR) of the project, internal rate of return (IRR) and discounted payback period (DPBP) of the investment, and levelized cost of energy (LCoE) from the CSP technology. The meteorological data for a specific location in the city of Tucson in Arizona is collected from a network of automated weather stations, and the NREL System Advisor Model (SAM) is applied to simulate hourly energy output of the CSP plant. An Excel spreadsheet tool is designed to calculate, in a bottom-up approach, the financial metrics required for approval of CSP projects. The model is tested on a 50 MW parabolic trough CSP plant and the results show an annual energy production of 456,351,232 kWh, NPV of over $64 million and LCoE of 0.16 $/kWh. Finally, a sensitivity analysis is performed to identify the factors which have the most significant effect on the economic performance of CSP technologies. The proposed model can provide valuable guidance to support the strategic planning and investment decision-making in CSP projects.

scholarly journals CAPM‐based capital budgeting and nonadditivity

2008 ◽  
Vol 26 (5) ◽  
pp. 388-398 ◽  
Author(s):  
Carlo Alberto Magni
Keyword(s):  
Decision Making ◽  
Net Present Value ◽  
Investment Decision ◽  
Capital Budgeting ◽  
Decision Makers ◽  
Capital Asset Pricing ◽  
Content Type ◽  
No Arbitrage ◽  
Asset Pricing Model ◽  
Investment Decision Making

PurposeIn investment decision making, the net present value (NPV) rule is often used alongside the well‐known capital asset pricing model (CAPM). In particular, the use of disequilibrium NPV is endorsed in corporate finance for both valuation and decision. The purpose of this paper is to test the reliability of this approach to capital budgeting valuations and decisions.Design/methodology/approachThe use of disequilibrium values for computing a project's NPV is considered, and the consistency with the CAPM is checked. The resulting valuation and decision are contrasted with the no‐arbitrage principle, which is universally considered a benchmark for rationality.FindingsThe paper finds that the disequilibrium NPV is logically deducted from the CAPM for decision‐making purposes. However, this NPV provides nonadditive values, which makes it inconsistent with the no‐arbitrage principle.Practical implicationsThe use of the CAPM+NPV procedure for valuing projects is invalid if disequilibrium values are used. Its use for decision making is logically valid but practically unsafe, because decision makers may frame equivalent courses of action in different ways, resulting in different decisions, which implies that they may incur arbitrage losses.Originality/valueThe literature does not distinguish between equilibrium and disequilibrium NPV nor between valuation and decision. This paper explicitly makes this distinction and the resulting consequences are highlighted.

scholarly journals "What If" Analyses in Investment Decision Making

2012 ◽  
Vol 3 (3) ◽  
pp. 5-16
Author(s):  
Katarína Belanová
Keyword(s):  
Decision Making ◽  
Cash Flow ◽  
Net Present Value ◽  
Investment Decision ◽  
Cash Flows ◽  
Present Value ◽  
Discounted Cash Flow ◽  
Basic Approach ◽  
Investment Decision Making ◽  
Future Cash Flows

In general, each project`s value is estimated using a discounted cash flow (DCF) valuation, and the opportunity with the highest value, as measured by the resultant net present value (NPV) will be selected. The problem with such NPV estimates is that they depend on projected future cash flows. If there are errors in those projections, then estimated net present values can be misleading (a forecasting risk). Basic approach to evaluating cash flow and NPV estimates involves asking “what – if” questions. Accordingly, the paper discusses some organized way s of going about a what – if analysis. Its goal in doing so is to assess the degree of forecasting risk and to identify those elements that are the most critical to the success or failure of an investment. However, as we show in examples, as well as in the practical study, though what – if analysis really allows us to obtain the certain idea of degree of forecasting risk, it does not tell us what to do about the possible errors.

scholarly journals Simulation model: Support to investment decision-making in the coal industry

2010 ◽  
Vol 14 (3) ◽  
pp. 835-844
Author(s):  
Zoran Gligoric ◽  
Cedomir Beljic ◽  
Vojin Cokorilo ◽  
Zlatko Dragosavljevic
Keyword(s):  
Decision Making ◽  
Net Present Value ◽  
Investment Decision ◽  
Energy Resource ◽  
Modern Society ◽  
Coal Industry ◽  
Triangular Distribution ◽  
Investment Decision Making ◽  
The Monte Carlo Method ◽  
Estimation Of Uncertainties

The paper deals with the problem of using coal as an energy resource bearing in mind the requirements of the modern society. Necessary changes in the coal industry demand a certain level of investments. Making relevant investment decisions is of crucial importance for the future efficiency of the system mine-power plant. The proposed model incorporates the procedure of decision-making simulation under the conditions of uncertain parameters. Net Present Value is used as the main criterion in decision-making. Different functions of probability distribution (normal, uniform and triangular distribution) are applied for the estimation of uncertainties related to certain parameters. For others, the estimation of future conditions is based on the Monte Carlo method and the simulation of geometric Brownian motion.

scholarly journals Improved capital budgeting decision making: evidence from Canada

2010 ◽  
Vol 48 (2) ◽  
pp. 225-247 ◽  
Author(s):  
Karim Bennouna ◽  
Geoffrey G. Meredith ◽  
Teresa Marchant
Keyword(s):  
Decision Making ◽  
Real Options ◽  
Net Present Value ◽  
Investment Decision ◽  
Weighted Average ◽  
Capital Budgeting ◽  
Large Firms ◽  
Content Type ◽  
Market Values ◽  
Investment Decision Making

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

The role of affective reactions on investment decision-making

2007 ◽  
Author(s):  
Enrico Rubaltelli ◽  
Giacomo Pasini ◽  
Rino Rumiati ◽  
Paul Slovic
Keyword(s):  
Decision Making ◽  
Investment Decision ◽  
Affective Reactions ◽  
Investment Decision Making
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