A capital investment approach to price formulae/determination

In an analysis of ten widely used price-control formulae it was shown that the formulae took into consideration a variety of different stipulations such as the calculation of funds employed, the definition of profit and the profitability rate allowed. Furthermore it is maintained that the commonly used intuitive and/or conventional methods of evaluation are subject to various shortcomings. Therefore, it can be inferred that it is virtually impossible to compare different price formulae in isolation. To overcome this problem a simulation model, based on certain assumptions, has been developed. The model compares and evaluates the adequacy of various price formulae over time (dynamically) in different ways, i.e. several ratios and criteria are calculated with the internal rate of return being the primary one. In the remaining three articles, the simulation model will be applied to the two formulae presented in this article.

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Notice of Retraction: Should Chinese government enhance Human Capital Investment in less developed areas? An analysis based on social internal rate of return

2011 International Conference on E-Business and E-Government (ICEE) ◽

10.1109/icebeg.2011.5885286 ◽

2011 ◽

Author(s):

Zhiyong Liu

Keyword(s):

Human Capital ◽

Capital Investment ◽

Human Capital Investment ◽

Rate Of Return ◽

Chinese Government ◽

Internal Rate Of Return ◽

Internal Rate

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Risk Manage Capital Investment Decisions: A Lease vs. Purchase Illustration

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v25i3.1031 ◽

2011 ◽

Vol 25 (3) ◽

Author(s):

Thomas L. Zeller ◽

Brian B. Stanko

Keyword(s):

Capital Investment ◽

Net Present Value ◽

Investment Decisions ◽

Capital Budgeting ◽

Rate Of Return ◽

Internal Rate Of Return ◽

Wealth Creation ◽

Font Size ◽

Present Value ◽

Internal Rate

This paper demonstrates how to build risk into capital investment decisions.  We illustrate how to combine distribution theory, technology, and a business professional’s skills and insight into a capital investment analysis.  In addition, we show how management can approximate the risk of each cash flow estimate and display the overall capital investment results.  This framework is extended by showing how a mutually exclusive decision can be improved, using a lease versus purchase example.<a style="mso-footnote-id: ftn1;" name="_ftnref1" href="http://journals.cluteonline.com/index.php/JABR/author/saveSubmit/#_ftn1">[1]</a>  An Excel template is readily available from the authors allowing a hands-on application of the framework presented in this paper.  In addition, this paper positions the reader to comfortably use more advanced analytics, such as Monte Carlo simulation, a tool that is readily available in commercial software applications.<div style="mso-element: footnote-list;"> <hr size="1" /><div id="ftn1" style="mso-element: footnote;">This paper focuses on the application of net present value.  The advantage of using net present value in a capital budgeting decision is that it shows the potential stakeholder wealth creation and wealth destruction.  An internal rate of return analysis is intentionally left out of this paper.  According to Brealey, Myers and Allen, Principles of Corporate Finance, New York, NY: McGraw-Hill/Irwin 2006, pp. 91-99, internal rate of return should not be used to evaluate mutually exclusive capital investments.  </div></div>

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Cost and Benefit Analysis of One Tambon One Product: A Case study of Rattan and Bamboo Wickerwork Products Group of Bantungfak, Thailand

Journal of Business and Economics ◽

10.15341/jbe(2155-7950)/07.10.2019/006 ◽

2019 ◽

Vol 10 (7) ◽

pp. 654-657

Author(s):

Pathompong Kookkaew ◽

Keyword(s):

Capital Investment ◽

Net Present Value ◽

Investment Decision ◽

Rate Of Return ◽

Cost Ratio ◽

Internal Rate Of Return ◽

Present Value ◽

Financial Return ◽

Internal Rate ◽

Cost And Benefit Analysis

The purposes of this research study were cost and benefits analysis of Rattan and Bamboo Wickerwork Products Group. Qualitative study was employed to collect and analyze data using in-depth interview. Interview questions were related to costs and benefit, and return on investment analysis — Net Present Value: NPV, Internal Rate of Return: IRR, Benefit and Cost Ratio: B/C Ratio at Discount Rate of 7% of 10 years of project life. The results reveal that Net Present Value (NPV) was 137,391 Baht, Internal Rate of Return (IRR) was 30.89%, Benefit and Cost Ratio (B/C Ratio) was 1.04. Financial return is in capital investment decision criteria.

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A financial evaluation of price formulae

South African Journal of Business Management ◽

10.4102/sajbm.v16i2.1080 ◽

1985 ◽

Vol 16 (2) ◽

pp. 98-102

Author(s):

J. J. Doppegieter ◽

I. J. Lambrechts

Keyword(s):

Simulation Model ◽

Cash Flow ◽

Financial Structure ◽

Rate Of Return ◽

Internal Rate Of Return ◽

Financial Evaluation ◽

Internal Rate ◽

Price Formula

This is the second in a series of four articles on price formulae/determination. In the first a simulation model was developed and the criterion of evaluating the model, the internal rate of return, was introduced. In this article two price formulae are simulated and analysed in accordance with principles discussed in the first article. Significant differences emerge between the two formulae. The internal rate of return of formula B (which is expressed in terms of replacement values) is continuously more than 100 % higher and more stable than that of formula A (which is expressed in terms of historical values). It also appears that it can be misleading to judge the profitability of a price formula against the allowed rate of profitability. The adequacy of the price formulae for inflation is judged by examining the internal rate of return in a situation with and without inflation and by calculating the ratio between depreciation allowed and replacement investments. Finally, the effect of the formulae on financial structure is analysed by calculating a liquidity (based on cash flow) and a solvability ratio. In conclusion, it appears that formula B is superior to formula A, mainly as a result of differences between the price formulae.

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INDICATORS OF EVALUATION OF EFFICIENCY OF DEVELOPMENT OF HOTEL ENTERPRISES

Municipal economy of cities ◽

10.33042/2522-1809-2020-7-160-48-52 ◽

2020 ◽

Vol 7 (160) ◽

pp. 48-52

Author(s):

M. Shemet ◽

O. Kolontaievskyi

Keyword(s):

Net Present Value ◽

Evaluation Criteria ◽

Profit Maximization ◽

Investment Project ◽

Payback Period ◽

Rate Of Return ◽

Internal Rate Of Return ◽

Internal Rate ◽

Definition Of ◽

Dynamic Indicators

The purpose of the article is to determine the system of indicators for assessing the effectiveness of hotel enterprises. It is determined that the main criterion of the value of the investment project is the criterion of net discounted income. It is noted that the modified internal rate of return (MIRR) eliminates the lack of internal rate of return of the project, which occurs in the case of repeated outflows. It is noted that today there is no single approach to assessing the effectiveness of investment in hotel enterprises in accordance with the forms of ownership and their size, which is due to the need to ensure compliance with performance evaluation criteria and a system of indicators. Statistical and dynamic indicators of investment evaluation are considered Indicators are analyzed: simple (accounting) rate of return on the project (ARR), payback period (PP) Performance indicators taking into account the time factor are considered: discounted payback period (DPP), net discounted income (NPV), discounted profitability index (DPI), internal rate of return (IRR) and some others. The disadvantage of the discounted payback period has been identified - it does not take into account subsequent cash inflows, and therefore may serve as an incorrect criterion for the attractiveness of the project. The main advantages of static and dynamic indicators of investment project efficiency assessment are determined. It is noted that one of the main criteria of investment advantage of a project is profit maximization. Break-even analysis allows you to calculate the volume of sales at which the company's income equals costs. It is proposed to use the indicator modified internal rate of return (MIRR) It is determined that the most popular methods of assessing the effectiveness of the investment project today are the definition of such static indicators as simple rate of return, simple payback period and dynamic indicators, namely: discounted payback period, net present value, profitability index, internal rate of return and modified internal rate profitability. The most accurate results are given by dynamic indicators, as they take into account the value of money over time. Although dynamic methods are more accurate, all the considered methods of evaluating the effectiveness of the investment project have their pros and cons.

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Relationship of the capital investment coefficient, accounting and internal rate of return

Ekonomski izazovi ◽

10.5937/ekoizavov1609062m ◽

2016 ◽

Vol 5 (9) ◽

pp. 62-76

Author(s):

Mehmed Meta

Keyword(s):

Capital Investment ◽

Rate Of Return ◽

Internal Rate Of Return ◽

Internal Rate ◽

Relationship Of

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ANALISIS KELAYAKAN FINANSIAL INDUSTRI PENGOLAHAN KECAP ANEKA GUNA DI KOTA LANGSA

Jurnal Penelitian Agrisamudra ◽

10.33059/jpas.v2i1.229 ◽

2017 ◽

Vol 2 (1) ◽

pp. 21-30

Author(s):

Muhammad Jamil ◽

Januari Frizki Bella

Keyword(s):

Net Present Value ◽

Rate Of Return ◽

Internal Rate Of Return ◽

Present Value ◽

Internal Rate

Adapun tujuan dari Penelitian ini adalah untuk mengetahui kelayakan usaha industri pengolahan kecap Aneka Guna apabila dilihat dari segi kelayakan finansial. Penelitian ini menggunakan metode studi kasus. Lokasi penelitian yaitu di Kota Langsa dengan pertimbangan bahwa lokasi tersebut merupakan daerah yang terdapat industri pengolahan kecap asin dan mudah di jangkau oleh penulis. Waktu penelitian dilaksanakan pada Bulan Juni - Oktober 2014. Tenaga kerja yang digunakan berjumlah 27 orang, 20 tenaga kerja pria dan 7 orang tenaga kerja wanita. Jumlah penggunaan tenaga kerja selama 5 tahun sebesar 3759 HKP. Total biaya produksi yang dikeluarkan oleh pengusaha dalam usaha pembuatan kecap didaerah penelitian selama 5 tahun adalah Rp. 2.076.988.000,-. Pendapatan kotor yang diperoleh pengusaha sebesar Rp. 8.199.690.000,- dan pendapan bersih yang diperoleh sebesar Rp. 6.122.702.000,- Kota Langsa hanya memiliki 1 pengusaha pengolahan kecap asin dan dijadikan sebagai pengusaha sampel yaitu usaha industri pengolahan kecap asin Aneka Guna. Hasil perhitungan di peroleh Net Present Value (NPV) sebesar Rp. 263.281.290 (lebih besar dari nol), sedangkan Internal Rate of Return (IRR) sebesar 84% lebih besar dari tingkat bunga yang berlaku (D.F. = 18%), sedangkan Net B/C Ratio sebesar 3,27 (lebih dari pada 1) dan Pay Back Priod (PBP) 1 Tahun 6 Bulan (lebih kecil dari umur ekonomis).

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EVALUASI TERHADAP PENGELOLAAN SAMPAH DALAM MENINGKATKAN PELAYANAN ASET DI KOTA PEMATANGSIANTAR

Jurnal Teknik Sipil ◽

10.24002/jts.v13i3.881 ◽

2017 ◽

Vol 13 (3) ◽

pp. 240

Author(s):

Novdin M Sianturi

Keyword(s):

Net Present Value ◽

Payback Period ◽

Rate Of Return ◽

Cost Ratio ◽

Internal Rate Of Return ◽

Present Value ◽

Benefit Cost Ratio ◽

Internal Rate ◽

Benefit Cost

Abstrak: Pengelolaan sampah di Kota Pematangsiantar masih bertumpu pada pendekatan akhir (kumpul-angkut-buang), dengan tingkat pelayanan yang rendah, sehingga untuk meningkatkan pelayanan sampah, perlu dilakukan pemilahan di tempat penampungan sementara (TPS). Penelitian ini bertujuan untuk mengkaji sistem pengelolaan sampah dengan melakukan pemilihan di TPS dapat meningkatkan pelayanan aset persampahan sampai tahun 2015 secara teknis operasional dan dari aspek keuangan. Analisa teknis operasional aset pengelolaan sampah mulai dari pewadahan, pengumpulan dan pengangkutan sedangkan analisa keuangan dan analisa kelayakan menggunakan Net Present Value, Internal Rate of Return, Benefit/Cost Ratio, dan Payback Period. Dari hasil analisa tersebut diperoleh suatu sistem pengelolaan sampah dengan pemilihan di TPS berdasarkan zona pelayanan dengan skala prioritas secara bertahap daritahun 2013-2017, dapat meningkatkan cakupan pelayanan sampah eksisting rata-rata 6,69 %, cakupan pelayanan TPS eksisting rata-rata 8,29 %, dan cakupan pelayanan truk pengangkut sampah eksisting rata-rata 12,03 %. Investasinya layak, diperoleh Net Cashflow pada tahun 2020 sebesar Rp 1.720.242.284,-, NPV suku bunga 15 % bernilai positif, IRR > MARR 15 %, B/C Ratio > 1, dan PP 4,7 tahun, lebih pendek dari periode investasi 10 tahun. Dari Metode penelitian ini maka pengumpulan data, observasi lapangan dan pengukuran contoh timbulan sampah dengan sampel 4 TPS perumahan yang terlayani pengangkutan.

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TINJAUAN STUDI KELAYAKAN USAHA BADAN USAHA MILIK DESA (NAGARI) KAMANG HILIA SEJAHTERA KENAGARIAN KAMANG HILIA, KECAMATAN KAMANG MAGEK, KABUPATEN AGAM, PROVINSI SUMATERA BARAT

UNES Journal of Social And Economics Research ◽

10.31933/ujser.3.2.160-169.2018 ◽

2018 ◽

Vol 3 (2) ◽

pp. 160

Author(s):

Halkadri Fitra ◽

Salma Taqwa ◽

Charoline Cheisviyanny ◽

Abel Tasman ◽

Nurzi Sebrina

Keyword(s):

Cash Flow ◽

Net Present Value ◽

Average Rate ◽

Flow Analysis ◽

Payback Period ◽

Rate Of Return ◽

Internal Rate Of Return ◽

Present Value ◽

Internal Rate

Penelitian ini bertujuan untuk melihat kelayakan aspek keuangan usaha grosir sembako Badan Usaha Milik Desa (Nagari) Kamang Hilia Sejahtera di Kenagarian Kamang Hilia Kecamatan Kamang Magek Kabupaten Agam Provinsi Sumatera Barat yang dilakukan pada tahun 2018. Penelitian bersifat deskriptif kuantitatif dengan menggunakan metode cash flow analysis, payback period, net present value, profitability index, internal rate of return, dan average rate of return. Hasil penelitian menunjukkan bahwa nilai net cash flow Badan Usaha Milik Desa (Nagari) Kamang Hilia Sejahtera adalah positif yaitu Rp.21.774.000, nilai payback period adalah 1,15 tahun, nilai net present value positif sebesar Rp.10.680.034,47, nilai profitability index adalah positif 1,37, sedangkan nilai internal rate of return adalah 46,7% dan nilai average rate of return adalah 57,23%. Berdasarkan standar penilaian maka semua metode yang digunakan memberikan kesimpulan bahwa usaha grosir sembako milik Badan Usaha Milik Desa (Nagari) Kamang Hilia Sejahtera dalam kategori layak untuk dilaksanakan.

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Analisis Kelayakan Finansial Usaha Ternak Ayam Kampung Super (Studi Kasus pada Peternakan Suparlan di Desa Jojog Kecamatan Pekalongan Kabupaten Lampung Timur)

Wahana Peternakan ◽

10.37090/jwputb.v3i1.112 ◽

1970 ◽

Vol 3 (1) ◽

Author(s):

Fikri Fathurahman Aziz

Keyword(s):

Return On Investment ◽

Net Present Value ◽

Secondary Data ◽

Payback Period ◽

Rate Of Return ◽

Primary Data ◽

Cost Ratio ◽

Internal Rate Of Return ◽

Present Value ◽

Internal Rate

This study aims to analyze financially (net present value, revenue cost ratio, internal rate of return, break event point, return on investment and payback period) feasibility of kampung super chicken farming Mr. Suparlan in Jojog village, district Pekalongan, East Lampung regency. The data used in the form of quantitative and qualitative data sourced from the primary data and secondary data which is then analyzed descriptively. Based on the analysis, it is known that kampung super farm is financially feasible to cultivate. This is indicated by the positive value of net present value (NPV) of Rp 186,568,517, revenue ratio (RCR) 1.59, internal rate of return (IRR) of 135.82%, return on investment (ROI) of 43%, and the value of payback period (PP) of 0.50. Keywords: financial feasibility, kampung chicken, chicken farm

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