scholarly journals Methodology for calculating the criteria of economic efficiency of investments in nuclear icebreakers

2021 ◽  
Vol 7 (4) ◽  
pp. 333-339
Author(s):  
Artem V. Klauz ◽  
Igor E. Frolov ◽  
Vladimir V. Kharitonov ◽  
Aleksandra A. Shaeva
Keyword(s):  
Discount Rate ◽  
High Speed ◽  
Financial Burden ◽  
Investment Project ◽  
Mathematical Expression ◽  
Cash Flows ◽  
Payback Period ◽  
Operating Costs ◽  
Investment Efficiency ◽  
Capital Costs

An economic and analytical model for evaluating the criteria of efficiency (profitability) of investments in the projects of innovative nuclear icebreakers of the Northern Sea Route is suggested. The model is based on the new analytical representation of the methodology for forecasting the investment project efficiency that is widely used in international practice. The mathematical expression for the net discounted income provides convenient formulas for calculating several investment efficiency criteria for nuclear icebreakers: internal rate of return, minimum annual revenues from icebreaker convoys, discounted payback period, and the volume of delivered cargo. The paper gives estimates of the criteria for the efficiency of investments in “Leader” class icebreakers that depend on the discount rate of cash flows, capital, and operating costs. It is shown that at high capital costs, typical for construction of “Leader” class nuclear icebreakers, the minimum required revenue of an icebreaker, representing a financial burden for ships transporting cargo along the NSR, rapidly increases with the growth of discount rate and the reduction of investment payback period. This means that the profitability of such icebreakers is only possible at low discount rates of 2–3% per year, which is an extremely low-interest credit. Even with low interest and impressive technical characteristics of the icebreaker (high speed of navigation, large number of ships in the caravan and their maximum capacity) the payback period would exceed 25 years.

scholarly journals Feasibility study of the insulation of the enclosing walls of high-rise buildings

2018 ◽  
Vol 245 ◽  
pp. 06006 ◽  
Author(s):  
Olga Gamayunova ◽  
Mikhail Petrichenko ◽  
Tatyana Musorina ◽  
Eliza Gumerova
Keyword(s):  
Feasibility Study ◽  
Thermal Insulation ◽  
Payback Period ◽  
Operating Costs ◽  
Optimum Thickness ◽  
Heating Period ◽  
Apartment Building ◽  
Capital Costs ◽  
High Rise ◽  
Additional Layer

On the example of a typical residential multi-apartment building, a feasibility study was carried out on the choice of energy-saving measures for the thermal insulation of facades. The decision to increase the energy efficiency of the building was made on the basis of calculating the loss of thermal energy through the external walls. Based on the parameters of the heating period, capital costs for additional thermal insulation of facades and calculated values of operating costs for heating, the optimum thickness of the additional layer of insulation is determined, in which the payback period assumes a minimum value.

scholarly journals The effect of inflation on the optimum payback cut-off

1991 ◽  
Vol 22 (1/2) ◽  
pp. 22-32
Author(s):  
J. U. De Villiers
Keyword(s):  
Discount Rate ◽  
Investment Decision ◽  
Cash Flows ◽  
Payback Period ◽  
Investment Appraisal ◽  
Systematic Relationships

Despite the theoretical criticisms against it, payback is one of the most commonly used methods of investment appraisal in practice. Its ease of calculation and simplicity are seen as its most important advantages. In addition, an unsophisticated method like payback can yield the correct investment decision as long as the correct cut-off is specified. In this paper the optimum payback cut-off and how it is influenced by inflation is studied. Three different methods of calculating payback under inflation are investigated. In all of these the optimum cut-off depends upon the type of assets (current, depreciable or non-depreciable assets) as well as the life of depreciable assets employed. The study shows that the optimum nominal payback cut-off (where the payback calculation is based on inflated cash flows) decreases with increasing inflation for all asset types. The optimum real payback cut-off (based on nominal cash flows adjusted for inflation) does not change with inflation. The optimum uninflated payback cut-off (where inflation is ignored) decreases rapidly with inflation for projects employing current assets. In the paper is shown that complex but systematic relationships exist between a project's payback period and its discount rate. Despite its deficiencies, the use of the payback method is therefore not entirely irrational.

scholarly journals Multicriteria Evaluation of Transport Plan for High-Speed Rail: An Application to Beijing-Xiongan

2019 ◽  
Vol 2019 ◽  
pp. 1-23 ◽  
Author(s):  
Asim Farooq ◽  
Mowen Xie ◽  
Svetla Stoilova ◽  
Firoz Ahmad
Keyword(s):  
Remote Sensing ◽  
High Speed ◽  
Payback Period ◽  
Operating Costs ◽  
Analytic Hierarchy ◽  
High Speed Railway ◽  
Promethee Ii ◽  
Railway Line ◽  
New City ◽  
Hierarchy Process

Beijing has an enormous transportation challenge: to relieve the extreme congestion that has arisen, largely due to overpopulation. To meet this challenge, the city administration has decided to extend its territory; a new city will be planned and built. This new city, Xiongan, will reduce the burden on the capital. A new high-speed railway (HSR) line is designed to transport millions of people every day within less than an hour. This study applies the potential of Geographical Information Systems (GIS) and multicriteria methods, Analytic Hierarchy Process (AHP) and Preference Ranking Organization Method for Enrichment Evaluations (PROMETHEE II), to determine the best alternative of transportation for the new high-speed railway line between Beijing and Xiongan, comparing different ones. The methodology consists of two stages. In the first stage remote sensing datasets such as ASTER DEM and LANDSAT images and GIS software such as ERDAS IMAGINE and ArcGIS have been used to determine settlement distribution, station location, elevation model, slope percentage, vegetation percentage, and route alignment for a new high-speed railway line for better understanding of its spatial distribution pattern over the study area. The second phase of the study focusing on assessing the various alternatives of transportation has been determined, and three approaches to choosing the best alternative have been introduced. In the paper we examine criteria associated with travel and economic criteria: travel time, the number of train stops, public satisfaction with transport, the number of seats per day, connectivity, operating costs, profit, and the payback period. Six alternatives of transportation have been studied. The stops in Guan and stations in the metro’s rings have been investigated. In the second stage, the Analytic Hierarchy Process (AHP) and PROMETHEE II methods have been used to select the best alternative. The first approach uses only criteria related to the trip, as the criterion to choose the best alternative is the maximum of the net outranking flows by PROMETHEE II method; the second approach applies two independent criteria: the ratio of normalized operating costs and the normalized net outranking flows, and the ratio of the normalized payback period and the normalized net outranking flows; the third approach includes all defined criteria, and the criterion of choosing the best alternative is the maximum of net outranking flows as calculated by the PROMETHEE II method. The approaches have been analyzed with the purpose of comparing the results. The result indicates that it is expedient to have a station in Guan, which will increase the connection and connectivity among the cities while providing fast mobility options for a large number of inhabitants of Guan city. Furthermore, the result from Remote Sensing and GIS analysis demonstrates that the proposed high-speed railway line will be environmentally sustainable and is economically/socially feasible and that it will certainly attract current and future passengers because of their needs.

Pricing the Planet's Future

2012 ◽  
Author(s):  
Christian Gollier
Keyword(s):  
Discount Rate ◽  
Investment Project ◽  
Environmental Problems ◽  
Cash Flows ◽  
Infrastructure Investment ◽  
Dynamic Problems ◽  
Public Infrastructure ◽  
Policy Debates ◽  
Ideal Framework ◽  
Pension Benefits

Our path of economic development has generated a growing list of environmental problems including the disposal of nuclear waste, exhaustion of natural resources, loss of biodiversity, climate change, and polluted land, air, and water. All these environmental problems raise the crucial challenge of determining what we should and should not do for future generations. It is also central to other policy debates, including, for example, the appropriate level of public debt, investment in public infrastructure, investment in education, and the level of funding for pension benefits and for research and development. Today, the judge, the citizen, the politician, and the entrepreneur are concerned with the sustainability of our development. The objective of this book is to provide a simple framework to organize the debate on what we should do for the future. A key element of analysis by economists is the discount rate—the minimum rate of return required from an investment project to make it desirable to implement. The book outlines the basic theory of the discount rate and the various arguments that favor using a smaller discount rate for more distant cash flows. With principles that can be applied to many policy areas, the book offers an ideal framework for dynamic problems and decision making.

scholarly journals Discount rate selection for long-term sequential mineral projects

2017 ◽  
Vol 33 (3) ◽  
pp. 49-70 ◽  
Author(s):  
Piotr W. Saługa
Keyword(s):  
Economic Evaluation ◽  
Cash Flow ◽  
Discount Rate ◽  
Flow Analysis ◽  
Capital Intensity ◽  
Cash Flows ◽  
Time Varying ◽  
Discount Rates ◽  
Capital Costs

AbstractMineral projects depict various specific features that differentiate them from alternative investments in other industries. Among these features, one can specify unique characteristics of mineral deposits such as scarcity, geological setting and structure, resource/reserve uncertainty and depletability. Resource uncertainty results in the sequential nature of operations (exploration, development and production stages). Other specific features of mineral projects include long investment - and production periods, high capital intensity, varying production conditions, unpredictability and high volatility of mineral prices, etc. Specific features of mineral projects are sources of exceptionally high risks. To ensure the payback of high capital costs these significant risks must be addressed in the economic evaluation of a mineral project. In the discounted cash flow analysis, DCF, which is the most commonly used in evaluations of such ventures, all project uncertainties are reflected in a level of the discount rate used for the actualization of future cash flow values. The riskier project has a higher discount rate. Apart from being extremely high risk, mineral projects are both sequential and long-term - the first feature means that the extent of a project risk decreases dramatically over time, and second - that care should be taken when evaluating these projects because cash flows arising in later years of the project lifetime have little value. The paper delivers a proposal to apply the time-varying discount rate to the economic evaluation of a mineral project. The first part introduces a commonly accepted approach to evaluating discount rates along with conceptions of adjusting them to risks of individual projects. In the following sections, the article presents the current practice in the setting of discount rates for mineral projects and then a proposed modification of this approach by introducing the time-varying discount rate. In the end, a verification of the proposed suggestion based on a copper project example has been delivered.

scholarly journals JUSTIFICATION FOR CHOOSING THE DISCOUNT RATE IN INVESTMENT ANALYSIS

2021 ◽  
pp. 21-28
Author(s):  
Светлана Викторовна Кузина ◽  
Павел Константинович Кузин
Keyword(s):  
Discount Rate ◽  
Economic Efficiency ◽  
Methodological Approach ◽  
Investment Project ◽  
Cash Flows ◽  
Present Value ◽  
Investment Projects ◽  
The Future ◽  
Value Of Cash ◽  
Future Value

Статья посвящена вопросам выбора ставки дисконта для приведения будущей стоимости денежных потоков к настоящей стоимости с помощью коэффициента дисконтирования. Целью исследования является анализ и обоснование выбора численного значения ставки дисконта в зависимости от источников финансирования инвестиционного проекта. Авторами приведены практические рекомендации по выбору метода оценки экономической эффективности привлечения инвестиций как для экономически обособленного инвестиционного проекта, так и для инвестиционного проекта, интегрированного в действующее предприятие. Научная новизна полученных результатов заключается в разработке методического подхода к выбору численного значения ставки дисконта для приведения будущей стоимости денежных потоков к настоящей стоимости с помощью коэффициента дисконтирования и к выбору приоритетного метода оценки экономической эффективности для экономически обособленных и интегрированных в действующее предприятие инвестиционных проектов. The article is devoted to the issues of choosing the discount rate for bringing the future value of cash flows to the present value using the discount coefficient. The purpose of the study is to analyze and justify the choice of the numerical value of the discount rate depending on the sources of financing of the investment project. The authors provide practical recommendations on the choice of a method for assessing the economic efficiency of attracting investment both for an economically isolated investment project and for an investment project integrated into an operating enterprise. The scientific novelty of the obtained results consists in the development of a methodological approach to the choice of the numerical value of the discount rate for bringing the future value of cash flows to the present value using the discount coefficient and the choice of a priority method for assessing economic efficiency for both economically isolated and integrated investment projects in an operating enterprise.

scholarly journals ORGANIZATION OF HIGH-SPEED MOVEMENT IN THE DIRECTION

2020 ◽  
Author(s):  
Anton Kovalov ◽  
Svіtlana Prodashchuk ◽  
Vitalii Slobodianiuk ◽  
Ivan Shulzhenko ◽  
Olga Horbatenko
Keyword(s):  
High Speed ◽  
Investment Project ◽  
Private Investment ◽  
Payback Period ◽  
The State ◽  
Rate Of Return ◽  
Rolling Stock ◽  
Internal Rate Of Return ◽  
Passenger Traffic ◽  
Internal Rate

The article considers the effectiveness of the introduction of speed and high-speed traffic. The experience of foreign countries shows that the development of high-speed rail traffic has increased competitiveness between different modes of transport, population mobility, reduced the loss of passenger traffic by attracting additional passenger traffic and increased profits. The state of speed and high-speed passenger traffic in Ukraine is analyzed, the main factors influencing the possibility of introduction of such traffic are revealed. The main ones are: lack of state financial support and private investment for the modernization of the railway or the construction of specialized tracks, the purchase of special rolling stock. In conclusion, attention should be paid to improving the state of the railway infrastructure to increase the profits of the railway and the ability to further invest in the implementation of such projects.The method of determining the required investments from the sources necessary for the implementation of large-scale projects of public importance, which depend on the internal rate of return on the project, the internal rate of return in the industry and capital investment in the project. Economic justification of the expediency of the organization of high-speed and high-speed traffic in Ukraine is an investment project, which provides for a phased investment in construction, which will further receive annual profits from passenger transportation. To solve this type of problem, it is proposed to use the net discounted income that can be obtained during the project and after its completion. It takes into account the income achieved in a given year of calculation, the costs incurred in the same year, the discount rate set by the investor and the payback period of the project.If the demand factor for transportation fluctuates, it is possible to calculate the company's income for the following years and determine the payback period of the investment project.

Light Railways as the Basic for Transport Infrastructure Development in Northern Territories of Russia

2020 ◽  
pp. 97-101
Author(s):  
P.I. Tarasov
Keyword(s):  
High Speed ◽  
Road Transport ◽  
Transport Infrastructure ◽  
The Arctic ◽  
Infrastructure Development ◽  
Capital Costs ◽  
New Type ◽  
The Republic ◽  
Northern Territories ◽  
Mode Of Transport

Research objective: studies of economic and transport infrastructure development in the Arctic and Northern Territories of Russia. Research methodology: analysis of transport infrastructure in the Republic of Sakha (Yakutia) and the types of railways used in Russia. Results: economic development of any region is proportional to the development of the road transport infrastructure and logistics. When a conventional railway is operated in the Arctic conditions, it is not always possible to maintain a cargo turnover that would ensure its efficient use, and transshipment from one mode of transport to another is very problematic. A new type of railway is proposed, i.e. a light railway. Conclusions: the proposed new type of transport offers all the main advantages of narrow gauge railroads (high speed of construction, efficiency, etc.) and helps to eliminate their main disadvantage, i.e. the need for transloading when moving from a narrow gauge to the conventional one with the width of 1520 mm, along with a significant reduction in capital costs.

Performance of lamella clarifiers for juice and syrup clarification

2017 ◽  
pp. 144-150
Author(s):  
Peter W. Rein ◽  
M. Getaz ◽  
A. Raghunandan ◽  
N. du Pleissis ◽  
H. Saleh ◽  
...  
Keyword(s):  
Residence Time ◽  
Flow Characteristics ◽  
Preliminary Test ◽  
Practical Experience ◽  
Operating Costs ◽  
Capital Costs ◽  
Computational Fluid Dynamics Cfd ◽  
Improved Performance ◽  
Work Done ◽  
Good Flow

A new design for syrup and juice clarifiers is presented. The design takes advantage of the considerably improved performance of clarifiers incorporating lamella plates, and the reasons for the improvement are outlined. Computational fluid dynamics (CFD) work done to simulate the performance is summarised. This design enables the residence time to be dramatically reduced and the simplified design leads to cheaper and better clarifiers. Practical experience with factory scale units is described, confirming the good flow characteristics. The results of preliminary test work on a factory syrup clarifier are presented, which is also shown to operate efficiently as a phosphatation clarifier. In addition the performance of a full-scale juice clarifier has been evaluated and compared with the performance of a Rapidorr clarifier. This work confirms the considerable advantages which this type of design provides, in realising substantial reductions in residence time, capital costs and operating costs.

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