Academic literature on the topic 'Return on Net Investment Cash Flow'
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Journal articles on the topic "Return on Net Investment Cash Flow"
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Stefanie, Stefanie, and Loh Wenny Setiawati. "PENGARUH NET PROFIT MARGIN, ARUS KAS OPERASI DAN REPUTASI AUDITOR TERHADAP RETURN SAHAM PADA PERUSAHAAN MANUFAKTUR PERIODE 2014-2017." AJAR 2, no. 02 (September 10, 2019): 1–18. http://dx.doi.org/10.35129/ajar.v2i02.79.
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Investments are made by investors to get a return. Return is a profit of an investment. Stock Return has a significant effect in determining the value of company’s stock. Investors will be interested to invest in companies with a high return. This research aimed to analysis the effect of net profit margin, operating cash flow and auditor reputation for the period 2014 – 2016 to stock return for the period 2015 – 2017 on manufacturing companies that listed on Indonesia Stock Exchange. Net profit margin is calculated by using net income after tax divided by total net sales for the period from audited financial statements. This research used secondary data which is from financial reports with purposive sampling. Research sample counted 55 manufacturing companies listed in Indonesia Stock Exchange period 2014 – 2017.
The results of this research showed that net profit margin and auditor reputation do not have a significant effect on stock return while operating cash flow has a significant effect on stock return.
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Myniv, R. M. "Methodical approaches to the assessment of investment attractiveness of agricultural enterprises." Scientific Messenger of LNU of Veterinary Medicine and Biotechnologies 21, no. 93 (November 16, 2019): 63–69. http://dx.doi.org/10.32718/nvlvet-e9313.
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Evaluation of investment efficiency is central to the process of justifying and selecting possible options for investing in investment projects, and is therefore a key to successful implementation of investment activities of agricultural enterprises. The main directions of financing of investment projects of agricultural enterprises are: purchase or construction of unfinished construction objects, new construction, expansion of existing enterprises, reconstruction of existing enterprises and technical re-equipment of existing enterprises. Two main groups of methods of assessing the cost-effectiveness of investment projects have become most widespread: static and dynamic. Static methods involve the calculation of indicators based on undiscounted cash flows. Dynamic methods, on the contrary, take into account the change in the value of money over time and imply bringing the values of all cash flows to the same period by discounting or compounding. Dynamic methods for assessing the effectiveness of investment projects include the following basic methods that rely on most modern Ukrainian enterprises, such as net present value cash flow (NPV), internal rate of return (IRR), payback period (DPP) and project profitability index (PI). On their basis the basic methods of selection of investment projects of agricultural enterprises are formed. Net Present Value (NPV) calculation. is based on comparing what will be invested in the future with what is invested now. The Profitabale Index (PI) is directly related to net present value and is defined as the ratio of the discounted cash flow to initial investment. The IRR (Internal Rate of Return) is the discount rate at which the projected cash inflows are equal to the project's discounted cash flows. As indicators of the effect in calculating the overall efficiency of investments, it is advisable to use changes in the following values of growth: revenue from the sale of enterprise products; gross income; profit before tax; net profit; cash flow; clean products. Gross and net investment should be included in the costs. The use of qualitative methods in investment analysis is due to the following reasons: the subjectivity of the phenomena or characteristics studied; lack or lack of necessary information; inability to analyze objective and acceptable methods; lack of research object (to be created during project implementation). Quantitative methods for evaluating agricultural investment projects include methods of probability theory and mathematical statistics, as well as economic and statistical methods.
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PARTHASARATHY, V. R. PERRY. "Managing uncertainty: A case for using real options with option pricing model (OPM) to evaluate capital investment." TAPPI Journal 12, no. 7 (August 1, 2013): 69–77. http://dx.doi.org/10.32964/tj12.7.69.
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The pulp and paper industry relies heavily on the traditional discounted cash flow-based net present value (DCF-NPV) for making capital investment decisions. The deficiency of the DCF-NPV model is that it is static; once a pattern of cash flow is established, management does not have the option to change the direction when new information is available. However, flexibility to alter the investment decision is a powerful strategic and capital investment tool. Abundant research has established strong precedence for applications of “real options” in operational and strategic settings to provide useful insights in the evaluation of irreversible investments under uncertainty. The binomial or Black-Scholes option pricing model (OPM) for strategic planning and capital investment has been used in many other industries but not in the pulp and paper industry. The pulp and paper industry, though very capital intensive, has provided poor to moderate return on investment or return on capital and has never used the OPM and the flexibility it offers for capital investment decisions. This paper makes a case for using OPM for capital investment decisions by using the example of a hypothetical North American mill considering investments to modernize its papermaking operation.
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Putri, Sefka Anggraini, Reni Oktavia, and Widya Rizki Eka Putri. "Pengaruh Kinerja Keuangan Terhadap Rate of Return (Studi Empiris Pada Perusahaan Pertambangan Yang Terdaftar di BEI Tahun 2014-2018 )." Jurnal Akuntansi dan Keuangan 25, no. 2 (July 17, 2020): 101–17. http://dx.doi.org/10.23960/jak.v25i2.136.
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The purpose of this study was to examine the effect of financial performance on the rate of return. The indicators used to measure financial performance are return on investment, net profit margin, earnings per share, operating cash flow, economic value added. This study uses secondary data with a population of companies listed on the Indonesia Stock Exchange (BEI) 2014-2018. The method used to determine the sample using purposive sampling. Consists of 19 industrial mining companies with 56 samples. The analysis method used is multiple regression analysis. The results of hypothesis testing show that the Return on Investment (ROI) has no significant effect on the Rate of Return (ROR), Net Profit Margin (NPM) has significant effect on the Rate of Return (ROR), Earning Per Share (EPS) has no significant effect on the Rate of Return (ROR), Operating Cash Flow(OCF) has no significant effect on the Rate of Return (ROR), Economic Value Added (EVA) has no significant effect on the Rate of Return (ROR)
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Zinkhan, F. Christian. "The Term Structure of Interest Rates and the Evaluation of Forestry Investments: A Note." Southern Journal of Applied Forestry 12, no. 4 (November 1, 1988): 256–58. http://dx.doi.org/10.1093/sjaf/12.4.256.
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Abstract The forestry literature generally assumes that the appropriate discount rate to be used in the estimation of a given investment's net present value is the same over its lifetime. However, the values of many alternative investments such as stocks and bonds often reflect term structures that are not flat. That is, the relationship between the number of years to maturity of an investment and that investment's required rate of return is often a significant consideration. This note suggests a procedure for incorporating a consideration of the term structure of interest rates into the determination of a discount rate specific to each annual net cash flow associated with a given long-term forestry investment. Using an actual 10-year case analysis, it was found that the valuation of a timberland tract varied by approximately 11%, depending upon whether or not the term structure of interest rates was recognized. South. J. Appl. For. 12(4):256-258.
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Bouillon, Marvin L., B. Michael Doran, and Peter F. Orazem. "Human Capital Investment Effects On Firm Returns." Journal of Applied Business Research (JABR) 12, no. 1 (September 12, 2011): 30. http://dx.doi.org/10.19030/jabr.v12i1.5834.
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This paper demonstrates that two measures of firm investment in specific human capital are significantly and positively correlated with long-term rates of return on investment. The final sample of 260 firms is a subset of the 805 firms included in the June 1984 edition of Forbes survey of executive compensation. We utilize two proxies for firm return-net income and cash flow. The return measures are scaled by both book value of total assets and market value of common stock yielding four alternative specifications of the rate of return measure. The firm investment in specific human capital measures are generally found to be significant explanatory variables in the regressions that have returns scaled by book value of assets. These measures of investment are insignificant when market value of common stock outstanding is used to scale the return measures. We interpret these findings to imply that a public or regulatory policy needs to be established to require firms to include at least some basic rudimentary information regarding their human capital investment, such as turnover rates and training cots, in their annual reports.
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De Albornoz, Vicente, Antonio Galera, and Juan Millán. "Is It Correct to Use the Internal Rate of Return to Evaluate the Sustainability of Investment Decisions in Public Private Partnership Projects?" Sustainability 10, no. 12 (November 23, 2018): 4371. http://dx.doi.org/10.3390/su10124371.
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Public Private Partnerships (PPP) are viewed by the private sector as investment projects. An investment criterion, such as the internal rate of return (IRR), widely used by practitioners, is thus necessary in order to determine if the opportunity is sustainable from an economic point of view and worth pursuing. However, a cash flow may have multiple IRRs—is it appropriate in the context of PPPs to use this criterion? This paper provides a clear proposition to determine the potential number of real positive IRRs a cash flow may have, depending on the number of sign variations and the value of the net present value (NPV) calculated with a discount rate equal to 0 (NPV(r = 0)). This proposition can sometimes be used when other tests (such as Norstrom’s Criterion) are inconclusive to determine if a cash flow has a single real positive IRR. The proposition is generally met by the typical cash flow of a PPP project, validating the use of IRR as an investment criterion.
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Kulakov, Nikolay, and Anastasia Blaset Kastro. "Evaluation of Financial Instruments Possessing Non-Conventional Cash Flow." Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438 12, no. 2 (July 2, 2018): 7–17. http://dx.doi.org/10.17323/j.jcfr.2073-0438.12.2.2018.7-17.
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Investments are often justified and accepted based on the IRR as the main criterion of profitability. However, that criterion is hardly ever used to evaluate some financial instruments (e.g. short sales, options, futures and swaps). This is partially due to the fact that some instruments possess a cash flow describing a borrowing rather than an investment. Others have a non-conventional cash flow and, consequently, the IRR may be meaningless or impossible to determine. We describe a non-conventional cash flow of a financial instrument as a non-conventional project consisting of a sequence of single-period (simple) projects. Each simple project has only two cash flows with opposite signs therefore the IRR for the simple project is always determined. If there is a decomposition in which each simple project has the same IRR value, then that value is the IRR of the non-conventional project. If a decomposition of the non-conventional project into simple projects with the same IRR is impossible, the non-conventional project’s IRR does not exist. If a simple project is an investment then the IRR is a rate of return for an investor. If a simple project is a loan then the IRR is an interest rate for the borrower, but not for the investor. Therefore the NPV method estimates a non-conventional project for two different participants simultaneously that leads to problems with definition of IRR. In order the loan’s IRR would be a rate of return for the investor, but not an interest rate for the borrower, the sign of IRR should be replaced to opposite one. The paper discusses how to use the Generalized Net Present Value (GNPV) method to calculate a yield of the financial instrument with non-conventional cash flow. The function GNPV(r, p) depends on two rates: finance and reinvestment ones that determine a cost of funding and a rate of return, respectively. The equation GNPV (r, -r) = 0 is investigated in the paper. The solution of that equation is the Generalized Average Rate of Return (GARR). We suggest using the GARR as a new measure of a yield for evaluating financial instruments possessing a non-conventional cash flow and estimating a portfolio’s performance over period with contributions and withdrawals.
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Nuraidi, Tomy Aji. "Capital Budgeting pada Proyek Teknologi 5G." Jurnal Manajemen Bisnis dan Kewirausahaan 5, no. 2 (March 29, 2021): 135. http://dx.doi.org/10.24912/jmbk.v5i2.11181.
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The development of digital business and internet technology in the telecommunications industry in Indonesia became a challenge for telecommunications companies, one of which is PT. Telkom Tbk. One study of the strategies that the author carefully regarding the analysis of Capital Budgeting on the 5th Generation (5G) technology project on PT. Telkom Indonesia (Persero) Tbk. and PT Telkomsel Tbk that using the cost benefit method. This study aims to provide a capital budgeting analysis to develop 5G network investment in Indonesia and assess investment feasibility. By using Payback Period calculation, Net Cash Flow and Internal Rate of Return can be identified the potential investment feasibility based on the value of the calculation and then the investment feasibility can be compared. The results show that the calculation of the payback period yields a value of 1.63 years. Whereas the calculation of net present value yields a value of Rp. 189,267 Trillion. For the average rate of return method, the ARR value is 1490.96%. Based on this value, it can be obtained that the 5G network investment project is feasible to be carried out by PT Telkom Tbk and PT Telkomsel companies. Perkembangan bisnis digital dan teknologi internet pada industry telekomunikasi di Indonesia menjadi tantangan tersendiri bagi perusahaan telekomunikasi salah satunya PT. Telkom Tbk. Salah satu kajian strategi yang penulis teliti mengenai analisis Capital Budgeting pada proyek teknologi 5 th Generation (5G) PT. Telkom Indonesia (Persero) Tbk. dan PT Telkomsel Tbk dengan menggunakan metode cost benefit. Penelitian ini bertujuan memberikan analisis capital budgeting guna mengembangkan investasi jaringan 5G di negara Indonesia dan menilai kelayakan investasi. Dengan menggunakan perhitungan Payback Period, Net Cash Flow dan Internal Rate of Return dapat diidentifikasi potensi kelayakan investasi berdasarkan nilai perhitungan tersebut dan selanjutnya dapat dibandingakan kelayakan investasi. Hasil menunjukkan untuk perhitungan payback period menghiasilkan nilai 1.63 tahun. Sedangkan perhitungan net present value menghasilkan nilai RP 189.267 Triliun. Untuk metode average rate of return nilai ARR adalah 1490,96%. Dengan berdasarkan nilai tersebut dapat diperoleh bahwa proyek investasi jaringan 5G layak dilakuakn perusahaan PT Telkom Tbk dan PT Telkomsel.
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Kulakov, Nikolay, and Anastasia Blaset Kastro. "Evaluation of Financial Instruments Possessing Non-Conventional Cash Flow." Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438 12, no. 2 (March 1, 2018): 131–41. http://dx.doi.org/10.17323/j.jcfr.2073-0438.12.2.2018.131-141.
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Investments are often justified and accepted based on the IRR as the main criterion of profitability. However, that criterion is hardly ever used to evaluate certain financial instruments (e.g. short sales, options, futures and swaps). This is partially due to the fact that some instruments possess a cash flow describing a borrowing rather than an investment. Other instruments have a non-conventional cash flow and, consequently, the IRR may be meaningless or impossible to determine. We may describe a non-conventional cash flow of a financial instrument as a non-conventional project consisting of a sequence of single-period (simple) projects. Each simple project has only two cash flows with opposite signs, therefore the IRR for the simple project is always determinable. If a functional decomposition is applied in which each simple project is shown to have the same IRR value, then that value is the IRR of the non-conventional project. However, where a decomposition of the non-conventional project into simple projects with the same IRR is impossible, the non-conventional project's IRR does not exist. If a simple project is an investment, then the IRR is a rate of return for an investor. If a simple project is a loan, then the IRR is an interest rate for the borrower, but not for the investor. Therefore, the NPV method is seen to estimate a non-conventional project for two different participants simultaneously, which leads to problems with the definition of the IRR. In order that the loan's IRR would be a rate of return for the investor, but not an interest rate for the borrower, the sign of the IRR should be replaced with the opposite one.
This paper discusses how to use the Generalized Net Present Value (GNPV) method to calculate a yield of a financial instrument with a non-conventional cash flow. The function GNPV(r, p) depends on two rates: a finance rate and a reinvestment rate, which determine a cost of funding and a rate of return, respectively. The equation GNPV (r, -r) = 0 is investigated in the paper. The solution of that equation is the Generalized Average Rate of Return (GARR).
We suggest using the GARR as a new measure of a yield for evaluating financial instruments possessing a non-conventional cash flow and estimating a portfolio's performance over time with contributions and withdrawals.
Dissertations / Theses on the topic "Return on Net Investment Cash Flow"
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Chaika, Tetiana, Nataliia Poberezhna, and Olga Panasenko. "Possibilities of using Ukrainian companies’ open financial statements in the profitability analyzing of cash flows." Thesis, Дике Поле, 2019. http://repository.kpi.kharkov.ua/handle/KhPI-Press/42712.
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Cash flow information is more transparent, easier to control, less affected by accounting policies, and more clearly shows whether a company generates real money. Therefore, it is obvious that when assessing the profitability, along with the other profitability ratios, it is also necessary to take into account return on cash flow ratios.
The Ukrainian companies’ financial statements contain information that allows to calculate a number of cash flow profitability metrics. There are various approaches to the design of cash flow profitability metrics: some of them interpret cash flow as a dynamic form of company’s monetary resources, and others – as a result of financial activity. Cash flow profitability metrics are less susceptible to distortion than traditional profitability metrics calculated by profit. Unfortunately, the statistical reports of the Ukraine State Statistics Service do not contain information about the cash flows of the Ukrainian business entities, so there is no possibility to compare the obtained values with industry average indicators. This makes it difficult to carry out comparative analytical work when using metrics of cash flow profitability.Інформація про рух грошових коштів більш прозора, легше піддається контролю, менше схильна до впливу облікової політики та чіткіше показує, чи генерує компанія реальні грошові кошти. Тому очевидно, що при оцінці прибутковості підприємства, поряд з іншими коефіцієнтами рентабельності, необхідно брати до уваги також і коефіцієнти рентабельності грошових потоків. Фінансова звітність українських підприємств містить інформацію, яка дозволяє розрахувати цілий ряд метрик рентабельності грошового потоку. Існують різні підходи до конструювання метрик рентабельності грошового потоку: одні з них трактують грошовий потік як динамічну форму грошових ресурсів підприємства, а інші – як результат фінансової діяльності. Метрики рентабельності грошового потоку менш схильні до спотворень, ніж традиційні метрики рентабельності, які розраховані за прибутком. На жаль, статистичні звіти Державної служби статистики України не містять інформації про грошові потоки українських суб'єктів господарської діяльності, тому відсутня можливість порівнювати отримані значення з середньогалузевими показниками. Це істотно ускладнює проведення порівняльної аналітичної роботи при використанні метрик рентабельності грошових потоків.
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Peterková, Marcela. "Hodnoceni investičního záměru vybrané firmy." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2016. http://www.nusl.cz/ntk/nusl-241585.
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The goal of this diploma thesis was to evaluate the complex investment project of modernization of production halls selected companies. The literature search methods are described, which were subsequently applied to the actual calculations on the basis of which were compiled cash flows of investment, determined discount rate calculations performed indicators selected from among the methods of static and dynamic. Was subsequently identified and assessed the risks associated with an investment by using Monte Carlo simulation. The conclusion of this work the company receives a recommendation whether or not to implement the project.
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Stránská, Eva. "Hodnocení připravovaného investičního projektu." Master's thesis, Vysoká škola ekonomická v Praze, 2014. http://www.nusl.cz/ntk/nusl-193383.
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The topic of the Master's Thesis is an evaluation of a real prepared development project considering strategic analysis. The strategic analysis contains an evaluation of current and expected macroeconomic situation including development of residential market in whole Czech Republic and Prague. The aim is to give a recommendation to investors whether to realize intended investment or not. The theoretical part clarifies specifics of investment decisions, defines entry parameters for investment evaluation and as well as introduces of particular stages of the evaluated investment project. In conclusion of theoretical part is described risk analysis. Introduction of the practical part is presentation of chosen development project. It is followed by analysis of its internal a external potential. After that comes the definition of entry values for evaluation of project by dynamic methods. The conclusion of the practical part includes sensitivity analysis and complex evaluation of investment project.
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Veselý, Jakub. "Zhodnocení ekonomické efektivnosti investičního záměru podniku." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2012. http://www.nusl.cz/ntk/nusl-223416.
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The main goal of my master thesis is evaluation an investment project of company on the base of dynamic methods of investment evaluation. Methods of evaluation are net present value, payoff period, gross investment, profitability index and internal rate of return.
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Koblihová, Markéta. "Zhodnocení ekonomické efektivnosti investice a návrh financování." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2015. http://www.nusl.cz/ntk/nusl-225282.
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The subject of this thesis is to evaluate the economic efficiency and financing of the investment project. The theoretical part of the thesis is focused on the basic theoretical knowledge in the field of investment decisions and the description of the main methods of assessing the effectiveness of investments. Another part explains the theoretical knowledge of financial and strategic analysis that affect investment decisions. The practical part of the work captures analysis of current state of the selected company. This analysis is the basis for drafting of the third part, which contains the proposals and recommendations of the investment project.
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Troanská, Eva. "Ekonomická efektivnost a finanční proveditelnost podnikatelského záměru." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2015. http://www.nusl.cz/ntk/nusl-227458.
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The work aims to determine the economic efficiency and financial feasibility of the business plan, the construction of residential housing complex using a sensitivity analysis to determine the risk that the economic efficiency of most influence. The theoretical part of this work are the basic areas relating to the evaluation of economic efficiency, cash flow, sensitivity analysis and development project. The practical part deals with a specific project CAMPUS REZIDENČNÍ AREÁL II. Showing cash flows on the project and determining the various indicators of economic efficiency. The study also prepared a sensitivity analysis for the project scenario and determine the maximum risk that may threaten the economic efficiency of the project.
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Lopeňová, Silvia. "Hodnocení ekonomické efektivnosti investičního projektu." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2014. http://www.nusl.cz/ntk/nusl-226772.
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Every company which wants to be successful has to face a question of successful investment and increase of financial resources. Therefore, it is necessary to re-search and deal with investment opportunities. The aim of this thesis is to define and evaluate indicators of efficiency of investment into the multifunctional object in the area of Zázrivá-Terchová in Slovakia. The thesis describes the actual division of investments and the sources of funding In the first part. Further, it deals with a cycle of the project and describes its particular phases. The thesis also examines technical-economic study that is discussed according to its chapters. It focuses on the part Financial analysis and estimate of investment in which the description of a process of defining of specific economic indicators and their assessment is provided. The practical part begins with defining of investment expenses and continues with operational expenses and incomes. The next part discusses calculation of Cash Flow and particular indicators of the project. The conclusion evaluates the project and its efficiency.
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Adam, Josef. "Hodnocení efektivnosti investičního projektu." Master's thesis, Vysoká škola ekonomická v Praze, 2008. http://www.nusl.cz/ntk/nusl-10584.
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This diploma thesis deals with issues surrounding the evaluation of investment project effectiveness. Apart from general characteristics and identification of key terminology in the area of investment decision making and capital planning, which are outlined in the theoretical part of this thesis, the section also provides an overview of methods used to evaluate the effectiveness of the investment decision making process. Particular attention is paid to the issue of criteria selection based on cash flows generated by the investment project. Theoretical findings regarding the evaluation of investment effectiveness are then used in the analytical part of this this by evaluating the effectiveness of a real-life investment project.
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Hub, Michal. "Ekonomická efektivnost a finanční proveditelnost podnikatelského záměru." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2016. http://www.nusl.cz/ntk/nusl-240075.
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The thesis deals with an investment project of reconstruction and operation of bakery Anežka in Palačov. The objective of the project is to evaluate the economic efficiency of the business plan. The thesis focuses on all costs and revenues which flow from the project throughout its working life, and on cash flow in individual years. At the end of the thesis, sensitivity analysis and risk assessment have been assessed, and several variations of the course of the projects, which can occur with regard to the likelihood of risk, have been created. The effects of these risks are compared by using the index indicators of profitability and net present value in the last chapter.
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Bílková, Alice. "Posouzení ekonomické efektivnosti investičního projektu." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2016. http://www.nusl.cz/ntk/nusl-240007.
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The subject of this thesis is to assess the economic efficiency of the investment project. The theoretical part focuses on the basic definitions related to investment decisions on the investment project and the project life cycle, cash flows and their predictions and recommendations to set them correctly, methods useful for assessing the effectiveness of the investment project and the indicators presenting the financial stability and feasibility of the project as well as factors affecting the overall investment decision, and finally the possibility of financing of the investment projects in the private sector. In the practical part there are the theoretical findings applied in the real investment project. Specifically, there will be analyzed the characterized investment project and its possible alternatives and finally made the assessment of economic efficiency.
Books on the topic "Return on Net Investment Cash Flow"
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Cash return on capital invested: Ten years of investment analysis with the CROCI economic profit model. Amsterdam: Butterworth-Heinemann, 2006.
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The ultimate guide to trust deed investing: Learn how to get a high return and steady cash flow. Richmond, VA: Tandem Books, 2007.
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Madden, Bartley. CFROI Cash Flow Return on Investment Valuation : A Total System Approach to Valuing the Firm. Butterworth-Heinemann, 1999.
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Smith, David M. Evaluating Hedge Fund Performance. Oxford University Press, 2017. http://dx.doi.org/10.1093/oso/9780190607371.003.0023.
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A diverse set of measures allow investors to evaluate hedge fund portfolio managers’ performance across different dimensions. The various measures quantify the effectiveness of security selection; account for investor flows, operating risk, and worst-case investment scenarios; net out benchmark and peer-fund performance; and control for risk factors that are unique to hedge fund investment strategies. Hedge fund return information in published databases is usually self-reported, which is a conflict of interest that produces several reporting biases and inflated published average returns. After adjusting for these biases, hedge fund average returns trail equity market returns and in fact almost exactly equal U.S. Treasury bill average returns between January 1994 and March 2016. Yet, after risk adjustment, the hedge fund performance picture brightens. In the aggregate, hedge funds have higher Sharpe ratios and multifactor alphas, and lower maximum drawdown levels than equity market benchmarks.
Book chapters on the topic "Return on Net Investment Cash Flow"
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Fraser, W. D. "Estimating the Required Return." In Cash-Flow Appraisal for Property Investment, 101–30. London: Macmillan Education UK, 2004. http://dx.doi.org/10.1007/978-1-137-11652-9_7.
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Arnold, Tom, and Terry Nixon. "Measuring Investment Value: Free Cash Flow, Net Present Value, and Economic Value Added." In Capital Budgeting Valuation, 57–77. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2013. http://dx.doi.org/10.1002/9781118258422.ch4.
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Hannay, Jo Erskine. "Benefit and Cost Periodized: Stretching Your Points." In Benefit/Cost-Driven Software Development, 87–100. Cham: Springer International Publishing, 2021. http://dx.doi.org/10.1007/978-3-030-74218-8_7.
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AbstractWhen you estimate the life cycle cost and benefit of your software product, your stakeholders should not only be assured that you will deliver value, but also be informed when that value is expected to manifest itself. Periodization is a common method for showing when a return of investment is expected, and one is often careful to express the present value of future cash (net present value) in such deliberations. This chapter shows how to carry out periodization using points. Periodized points then amount to plan templates that can be instantiated with monetary values according to most likely, bad-case, and good-case uncertainty assessments.
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Harvey, Adam. "19. Introduction; The Time Value of Money; The Annuity Equation; Unit Energy Cost and Net Income; Net Present Value: NPV (r%); Internal Rate of Return (IRR); Simple and Discounted Payback Periods; Bank Loans and Interest; Cash Flow Analysis." In Micro-Hydro Design Manual, 305–20. Rugby, Warwickshire, United Kingdom: Practical Action Publishing, 1993. http://dx.doi.org/10.3362/9781780445472.019.
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Gollier, Christian. "The Weitzman Argument." In Pricing the Planet's Future. Princeton University Press, 2012. http://dx.doi.org/10.23943/princeton/9780691148762.003.0007.
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This chapter examines a model in which the exogeneous rate of return of capital is constant but random. Safe investment projects must be evaluated and implemented before this uncertainty can be fully revealed, i.e., before knowing the opportunity cost of capital. A simple rule of thumb in this context would be to compute the net present value (NPV) for each possible discount rate, and to implement the project if the expected NPV is positive. If the evaluator uses this approach, this is as if one would discount cash flows at a rate that is decreasing with maturity. This approach is implicitly based on the assumptions that the stakeholders are risk-neutral and transfer the net benefits of the project to an increase in immediate consumption. Opposite results prevail if one assumes that the net benefit is consumed at the maturity of the project.
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"ACCOUNTING TO CASH FLOW RETURN ON INVESTMENT." In Beyond Earnings, 57–110. Hoboken, New Jersey: John Wiley & Sons, Inc., 2017. http://dx.doi.org/10.1002/9781119440512.ch3.
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Toulmin, Camilla. "Introducing Investment Options." In Cattle, Women, and Wells, 131–35. Oxford University Press, 2021. http://dx.doi.org/10.1093/oso/9780198853046.003.0007.
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This chapter offers a brief survey of how the investment literature deals with risk and uncertainty, and examines the reasons for variation in returns between farmers from the principal assets – wells, oxen plough-teams, breeding cattle. Simple decision-making models derive criteria for choosing between investment options according to the net present value, internal rate of return, and payback period associated with a given pattern of returns over time. Portfolio models presents the rationale for investment in a range of assets, the returns from which are poorly correlated. Farmers differ in terms of their access to factors of production, the scale of their activities, the opportunity cost of capital, and vulnerability to risk. Four idealised household types – A, B, C, D – are described in order to compare the flow of returns from the three principal investments – wells, oxen plough-teams, and breeding cattle.
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Gilligan, John, and Mike Wright. "Measuring Private Equity Performance." In Private Equity Demystified, 107–34. Oxford University Press, 2020. http://dx.doi.org/10.1093/oso/9780198866961.003.0003.
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This chapter explains how to measure private equity performance. One of the key distinctions to be focused on is the gross versus net performance of a fund or investor. Gross returns are the returns earned by the private equity fund before fees are paid to the manager. Meanwhile, net returns are the returns earned by the investors in the fund after the fees of the manager have been deducted. Various measures are applied to monitor and adjust for the timing differences between total return and receipt of cash flows. DPI measures distribution as a percentage of paid-in capital, while TVPI measures total value as a percentage of paid-in capital. However, the most commonly used measure is the Internal Rate of Return (IRR). IRR is a cash flow measure that allows for the timing of cash flows. The chapter then highlights the importance of understanding both the overall industry returns and their variance and volatility over time. The variation in returns between the most successful and least successful fund managers is a key statistic to understand the performance and risks of the industry.
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Smithers, Andrew. "Money- and Time-weighted Returns." In The Economics of the Stock Market, 84–86. Oxford University Press, 2022. http://dx.doi.org/10.1093/oso/9780192847096.003.0017.
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In aggregate shareholders’ returns must equal the return on corporate equity. But this return will be the money-weighted not the time-weighted return. The latter is the figure we have from the published data on shareholder returns and assumes that the dividends received on the investment are reinvested in the market. This is impossible in practice because the return on equity has been nearly twice the growth of the economy. To know the return on corporate net worth we need the money-weighted rate of return, which is the rate of interest which equals the present value of all past cash distributions to shareholders plus the change in the capital value of the stock market at the end of the period. Unfortunately, stock-market data are not available for broad dividends only for dividends as normally defined and my attempts to persuade Standard & Poor’s to provide the data have so far proved unavailing. If money-weighted returns were to become available, the value of the stock market could be derived from them and would add another useful check on the value of the stock market given by q and CAPE. The results published by companies have become increasingly volatile and thus suspect, so the need for another method of assessing market value is growing.
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"Financial Analyses." In Agricultural Finance and Opportunities for Investment and Expansion, 116–36. IGI Global, 2018. http://dx.doi.org/10.4018/978-1-5225-3059-6.ch007.
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Financial analyses provide an account of an enterprise's past performance, a picture of its current financial strength/weakness, and a glimpse into the future financial potential. The owner of a farm firm periodically assesses and analyses the performance of the enterprise against predetermined objectives. The analysis is undertaken with the use of some tools. Because the discerning farmer needs to keep objectives of the enterprise in constant view, this chapter focuses on financial analyses with a view to highlighting the tools used in assessing a farm firm performance against predetermined objectives. The discussions are based on a review of relevant literature. The objectives of this chapter include defining the concept of financial analyses, describing the tools for analyses and showing worked examples of financial analysis, and highlighting the concept of rate of return. Financial analyses can be undertaken by management of an enterprise or by parties outside the enterprise. The three commonly used tools of financial analyses, namely the balance sheet, the income statement, and the cash flow statement, tend to be associated with some flaws, especially with regard to the reliability and validity of the accompanying figures. As a result, results from financial analyses should be interpreted with caution. It is further recommended that financial analyses be matched with a more observable measure of the financial health of a farm enterprise in terms of physical growth and expansion, credit worthiness, and how the enterprise meets its maturing obligations.
Conference papers on the topic "Return on Net Investment Cash Flow"
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Ooi, D. "Comparative analysis of the relative attractiveness of the current fiscal terms in the South East Asia region." In Indonesian Petroleum Association 44th Annual Convention and Exhibition. Indonesian Petroleum Association, 2021. http://dx.doi.org/10.29118/ipa21-bc-205.
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This paper aims to assess the relative competitiveness of the current fiscal terms in South East Asia in the context of changes proposed and implemented across the region. A discounted cash flow (DCF) analysis was carried out based on the generic fiscal terms of Brunei, Indonesia, Malaysia, Thailand, and Vietnam based on an offshore, shallow water development. Where applicable, a comparison will be made against the previous fiscal terms of the country. Analysis will focus on investor returns and from the host government perspective evaluating net present value (NPV), internal rate of return (IRR), and government take. The fiscal terms were also assessed on whether they are progressive or regressive and provide an equitable return to both investors and host governments. Indonesia, Thailand, and Malaysia have seen recent shifts in their fiscal terms with new terms introduced in 2017, 2018, and 2021, respectively. Indonesia saw the introduction of the Gross Split Production Sharing Contract (GS PSC), which based on this analysis does not appear to be an improvement on the previous Cost Recovery Production Sharing Contract (CR PSC). Thailand saw the introduction of a CR PSC which was applied to the two expired offshore, producing, blocks. Based on our analysis, the newly introduced fiscal terms for Malaysia appears to provide a significant improvement to the previous terms and is likely to encourage further investment. Governments and regulators will face greater pressure to provide further incentives and greater flexibility to attract investments in the face of maturing fields, marginal fields, challenging sour gas resources, and capital constraints resulting from and Environmental, Social, and Corporate Governance (ESG) pressures on oil and gas companies.
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La¨uferts, Ulrike, Charlotte Halbe, and Aliki van Heek. "Value-Creating Investment Strategies to Manage Risk From Structural Market Uncertainties: Switching and Compound Options in (V)HTR Technologies." In Fourth International Topical Meeting on High Temperature Reactor Technology. ASMEDC, 2008. http://dx.doi.org/10.1115/htr2008-58157.
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To measure the value of a technology investment under uncertainty with standard techniques like net present value (NPV) or return on investment (ROI) will often uncover the difficulty to present convincing business case. Projected cash flows are inefficient or the discount rate chosen to compensate for the risk is so high, that it is disagreeable to the investor’s requirements. Decision making and feasibility studies have to look beyond traditional analysis to reveal the strategic value of a technology investment. Here, a Real Option Analysis (ROA) offers a powerful alternative to standard discounted cash-flow (DCF) methodology by risk-adjusting the cash flow along the decision path rather than risk adjusting the discount rate. Within the GEN IV initiative attention is brought not only towards better sustainability, but also to broader industrial application and improved financing. Especially the HTR design is full of strategic optionalities: The high temperature output facilitates penetration into other non-electricity energy markets like industrial process heat applications and the hydrogen market. The flexibility to switch output in markets with multi-source uncertainties reduces downside risk and creates an additional value of over 50% with regard to the Net Present Value without flexibility. The supplement value of deploying a modular (V)HTR design adds over 100% to the project value using real option evaluation tools. Focus of this paper was to quantify the strategic value that comes along a) with the modular design; a design that offers managerial flexibility adapting a step-by-step investment strategy to the actual market demand and b) with the option to switch between two modes of operation, namely electricity and hydrogen production. We will demonstrate that the effect of uncertain electricity prices can be dampened down with a modular HTR design. By using a real option approach, we view the project as a series of compound options — each option depending on the exercise of those that preceded it. At each end of the design phase, the viability will be reviewed conditional on the operating spread at each time step. We quantify the value of being able to wait with the investment into a next block until market conditions are favourable and to be able to abandon one block if market conditions are disapproving. To derive the intrinsic value of this multi block HTR design, it will be compared with a reference investment of a full commitment light water reactor without any managerial flexibility. In another case, we raise the question to what extent product output diversification is a suitable strategy to cope with long term market uncertainty in electricity price. What is the value of a multi-potent technology that is able to produce output for energy markets others than the electricity market? To investigate this, we concentrate on The Netherlands, a country with an intense industrial demand in electricity and hydrogen.
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Townsend, Aaron K., and Michael E. Webber. "Energetic and Economic Performance of a Compressed Air Energy Storage Facility in Texas as a Function of Technical and Cost Parameters." In ASME 2011 International Mechanical Engineering Congress and Exposition. ASMEDC, 2011. http://dx.doi.org/10.1115/imece2011-63830.
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In this research an optimization model was used to determine the sensitivity of the revenue, net cash flow (defined as revenue less amortized capital costs, fixed and variable operating costs, and return on investment), and operational characteristics of a compressed air energy storage (CAES) facility to certain technical factors in the Electric Reliability Council of Texas (ERCOT) zonal market. The technical factors considered were compressor capacity and storage capacity relative to turbine capacity, non-spinning reserve market participation, minimum allowable runtime of the compressor and turbine systems, and costs associated with startup of the compressor and turbine systems. Additionally, the work showed that the nine-year optimization problem could be decomposed into nine single-year optimization problems with decreased computation time and minimal divergence from the nine-year solution. Previous work had determined the optimal compressor and storage capacities for a given expander capacity; the current work expanded on the previous work to show that the economics of CAES are reasonably insensitive (defined as within 5% of the maximum net cash flow) to compressor capacity within a range of 0.45 to 0.8 MW per MW of turbine capacity in the West zone of ERCOT and 0.25 to 0.5 MW per MW of turbine capacity in the non-West zones in ERCOT. Similarly, the economics of CAES are reasonably insensitive to storage capacity within a range of 20 to 60 MWh per MW of turbine capacity in the West zone of ERCOT and 12 to 35 MWh per MW of turbine capacity in the non-West zones. Previous work had determined that participation of the turbine-generator system in the non-spinning reserve market increased the revenues and net cash flow and reduced the amount of electricity bought and sold in the balancing energy market. This work confirmed the previous finding and also determined that the participation of the motor-compressor as dispatchable load in the non-spinning reserve market increased the revenues and net cash flow and increased the amount of electricity bought and sold. The increase in electricity sales due to the motor-compressor participation in the non-spinning reserve market only partially offset the decrease in the amount of electricity sold due to the turbine-generator participation. The net effect of both systems participating in the non-spinning reserve market was an increase in revenue of 29% to 37% and net cash flow of 130% to 250% and a decrease in the amount of electricity bought and sold by about 10%. This work also found that a CAES facility is sensitive to minimum runtime constraints and startup costs. Minimum runtime constraints reduce the net cash flow by 11% to 13% and increase the amount of electricity bought and sold by 1% to 3%, for a minimum runtime of 4 hours. The effect of startup costs is to reduce both the net cash flow by 5% to 6% and the amount of electricity bought and sold by 4% to 5% for startup costs of $2/MW-start.
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dos Santos, Sidney Pereira. "Availability and Risk Analysis Effects on Gas Pipeline Tariff Making." In 2008 7th International Pipeline Conference. ASMEDC, 2008. http://dx.doi.org/10.1115/ipc2008-64083.
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On a competitive market gas transportation rates must be as low as possible while recovering capital expenses — Capex and operating and maintenance expenses — Opex at a return rate expected by the project sponsors to recover their investment. To guarantee project feasibility, designers must be concerned not only with technical and direct economic aspects but should also incorporate availability and economic risk analysis to make sure that under operating conditions along the economic life of a project the cash flow will be kept inside predicted values and therefore will not expose project sponsors to undesirable negative Net Present Values — NPV. This paper will present a methodology to address these important aspects with focus on pipeline economics. Pipeline availability study associated with compressor stations failure analysis will be evaluated under Monte Carlo simulation and consequently their impacts on gas pipeline capacity will be economically evaluated. Quantitative economic risk analysis using Monte Carlo simulation is part of the methodology. The adoption of this methodology allows committing more pipeline transmission capacity to a level close to maximum without exposing the Transporter to losses of revenue and contractual penalties. Also prevents designing an oversized and less competitive system with unused spare capacity and consequently higher transportation rates.
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Belhaj, Hadi, Mohamad Haroun, and Terry Lay. "Keeping Net Cash Flow Alive for a Petroleum Exploration Project: Risk Analysis Approach." In ASME 2010 International Mechanical Engineering Congress and Exposition. ASMEDC, 2010. http://dx.doi.org/10.1115/imece2010-37190.
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Meaningful risk analysis can be a tedious task to perform for many reasons, yet extremely rewarding. Lack of information, uncertainty surrounding risk parameters and their distributions, failure to define proper correlations relating some risk parameters, inappropriate selection of risk analysis criterion and misinterpretation of results are among these reasons. Risking net cash flow (NCF), through traditionally approaches can be a leap of faith. Rather, NCF should be treated with more subjectivity and in-depth understanding of all risk parameters and their interrelationships. Current practice of risk management in the petroleum industry adopts schemes that aim at separating risk into two main categories to understand, simplify, analyze, and evaluate existing contingencies. Commonly, the first category is referred to as subsurface risk that includes resource size, production rate, and access cost. Category two is surface risk that demonstrates total expenditure, facilities delivery, delays, performance, oil/gas prices, etc. Risk analysis of each is normally performed alone. Our study shows that separating risks for an investment with a singular outcome is misleading and extremely dangerous. In this paper, we introduce comprehensive criteria for handling risk associated with oil and gas exploration as well as development of mature reservoirs through EOR and IOR that involves large cash expenditures for; in-fill drilling, waterflooding, gas injection, and thermal and chemical treatment of heavy oil recovery. Basically, one or a combined uncertainty of these elements may create “business risk” that may cause “business impact”. The impact can be positive leading to “business opportunity” or negative leading to “business threat”. Also, instead of risking NCF using risk parameters like gross revenue that consists of hydrocarbon in-place and unit price of oil and gas, and net expenditure (CAPEX and OPEX) by simply defining their risk distributions and parameters, our approach breaks down each risk parameter to sub-parameters, then risk components and finally risk fragments. This produces a break-down model of risk analysis approach by including all parameters with no stage separation that avoids risk of poor assumptions. Hence, risk parameters are simplified by evaluating specific distributions. Case study involving one major Gulf States oil reservoirs is used to demonstrate the approach presented in this paper. Results show great improvement of results as compared to the traditionally used method.
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Mandolini, Marco, Federico Campi, Claudio Favi, and Michele Germani. "Manufacturing Processes Re-Engineering for Cost Reduction: The Investment Casting Case Study." In ASME 2019 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference. American Society of Mechanical Engineers, 2019. http://dx.doi.org/10.1115/detc2019-97532.
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Abstract The production cost is one of the most important drivers for product competitiveness. For increasing profits, a manufacturing process re-engineering is mandatory. This practice passes through systematic procedures for process selection, cost estimation and results analysis. This paper presents a method for evaluating different manufacturing alternatives for cost reduction. This method, composed of eight steps (most of them retrieved from the scientific literature), permits engineers to consider important aspects, such as the choice of cost estimation tools, the collection of data related to production processes, the impact related to the introduction of new production processes and the interpretation of results. Authors adopted such method for evaluating economic benefits of introducing a new manufacturing technology (i.e. investment casting) for three components of a food packaging machine. The adoption of the proposed method leads to compare investment casting vs. machining. The paper presents a detailed discussion of the economic benefits (return on investment, cash flows and manufacturing cost breakdown) related to the introduction of the investment casting technology.
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Perkins, Norman F., and Philip S. Stacy. "What Is Your Actual Pump Flow Rate?" In ASME/NRC 2017 13th Pump and Valve Symposium. American Society of Mechanical Engineers, 2017. http://dx.doi.org/10.1115/pvs2017-3512.
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What appears to be a simple question is often quite difficult to answer depending on the quantity of flow; and size, type, and location of piping. Even the reason for asking the question can be varied and complex — ranging from environmental regulation, investment decisions, aging infrastructure improvement planning, and new equipment evaluation. Absolute field performance testing of power plant equipment yields valuable data that can be used in a variety of ways. National and International codes list several methods to measure water flow in a performance application and provide realistic uncertainty estimates. Codes and standards exist for equipment evaluation and contractual performance tests. These Codes, though, are sometimes viewed as costly or perceived to impose additional risk on suppliers. Herein, we will present how to obtain performance test data and how that data can be used. In many rehabilitation or regulation driven projects, an accurate representation of the state of the existing power plant is desired. Pump curves typically do not represent an accurate depiction of flow due to equipment degradation, changes in system components/geometry, and/or bio-fouling. While the testing may be considered costly, it can often be justified as part of a rehabilitation project. Absolute testing provides a lower uncertainty that can yield more definitive estimates of return on investment to justify projects that might be otherwise considered marginal. Case studies will be discussed that illustrate these points, including: • Flow measurement feasibility and site testing at a nuclear thermal plant • In-situ flow testing to calibrate existing ultrasonic flow meters at a biomass thermal plant • Condenser performance testing at a nuclear thermal plant Paper published with permission.
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Heredia-Zavoni, Ernesto, and Sandra Santa-Cruz. "Maintenance Decisions for Offshore Structures Using Real Options Theory." In ASME 2004 23rd International Conference on Offshore Mechanics and Arctic Engineering. ASMEDC, 2004. http://dx.doi.org/10.1115/omae2004-51467.
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Real Options methods are currently used to assess investment projects considering: (1) the decision options that one can have along the development of the project, such as to expand it, or reduce it, or to abandon it, or to differ it, and (2) the uncertainty in some financial variables for the assessment of the economic investment. In these two regards, Real Options methods are superior to the traditional Net Present Value method. The purpose of the present paper is to establish the basis for Real Options modeling for decision making on design, inspection, maintenance, and decommissioning of offshore structures. The use of Real Options theory is sought in order to account for: (1) uncertainties in the financial variables involved in risk assessment based on expected costs, such as the economic consequences due to failure of a system; and (2) uncertainties associated with the resistance and loading of the structure for reliability assessment. An application of Real Options Theory is given in the paper for decision making on maintenance for an offshore structure. Cash flow from oil revenue is modeled as a stochastic process. Preventive and corrective maintenance is analyzed as a critical situation where the decision maker has the option to pay the costs of maintenance in order to obtain a benefit. Expressions are derived for the estimation of the value of the maintenance option; they are based on the derivation of the Black-Scholes equation for the evaluation of financial options. It is shown that the value of such project is equal to the sum of the net cash flow of the project (as with a Net Present Value evaluation) plus the value of the maintenance option. Projects with one and two decision times along the life of the structure are formulated and analyzed. Closed form solutions are obtained for such cases. An example is given in order to illustrate the differences between maintenance decisions using the Net Present Value and the Real Options method.
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Siefert, Nicholas, and Shawn Litster. "Exergy and Economic Analysis of Catalytic Coal Gasifiers Coupled With Solid Oxide Fuel Cells." In ASME 2011 9th International Conference on Fuel Cell Science, Engineering and Technology collocated with ASME 2011 5th International Conference on Energy Sustainability. ASMEDC, 2011. http://dx.doi.org/10.1115/fuelcell2011-54502.
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The National Energy Technology Laboratory (NETL) has undertaken a review of coal gasification technologies that integrate with solid oxide fuel cells (SOFC) to achieve system efficiencies near 60% while capturing and sequestering >90% of the carbon dioxide [1–2]. One way to achieve an overall system efficiency of greater than 60% is in a power plant in which a catalytic coal gasifier produces a syngas with a methane composition of roughly 25% on a dry volume basis and this is sent to a SOFC, with CO2 capture occurring either before or after the SOFC. Integration of a catalytic gasifier with a SOFC, as opposed to a conventional entrained flow gasifier, is improved due to (a) decreased exergy destruction inside a catalytic, steam-coal gasifier producing a high-methane content syngas, and (b) decreased exergy destruction in the SOFC due to the ability to operate at lower air stoichiometric flow ratios. For example, thermal management of the SOFC is greatly improved due to the steam-methane reforming in the anode of the fuel cell. This paper has two main goals. First, we converted the levelized cost of electricity (LCOE) estimates of various research groups into an average internal rate of return on investment (IRR) in order to make comparisons between their results, and to underscore the increased rate of return on investment for advanced integrated gasification fuel cell systems with carbon capture & sequestration (IGFC-CCS) compared with conventional integrated gasification combined cycle (IGCC-CCS) systems and pulverized coal combustion (PCC-CCS) systems. Using capital, labor, and fuel costs from previous researchers and using an average price of baseload electricity generation of $61.50 / MW-hr, we calculated inflation-adjusted IRR values of up to 13%/yr for catalytic gasification with pressurized fuel cell and carbon dioxide capture and storage (CCS), whereas we calculate an IRR of ∼4%/yr and ∼2%/yr for new, conventional IGCC-CCS and PCC-CCS, respectively. If the carbon dioxide is used for enhanced oil recovery rather than for saline aquifer storage, then the IRR values improve to 16%/yr, 10%/yr, and 8%/yr, respectively. For comparison, the IRR of a new conventional IGCC or PCC power plant without CO2 capture are estimated to be 11%/yr and 15.0%/yr, respectively. Second, we conducted an exergy analysis of two different configurations in which syngas from a catalytic gasifier fuels a SOFC. In the first case, the CO2 is captured before the SOFC, and the anode tail gas is sent back to the catalytic gasifier. In the second case, the anode tail gas is oxy-combusted using oxygen ion ceramic membranes and then CO2 is captured for sequestration. In both cases, we find that the system efficiency is greater than 60%. These values compare well with previous system analysis [1–4]. In future work, we plan to calculate the IRR of these two cases and compare with previous economic analyses conducted at NETL [1–2].
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de Brito Garcia, Claudio, and Leandro Bastos Machado. "Decision Making Under Uncertainty in Pipeline Projects Using Monte Carlo Simulation." In 2004 International Pipeline Conference. ASMEDC, 2004. http://dx.doi.org/10.1115/ipc2004-0241.
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Uncertainty about a situation can often indicate risk, which is the possibility of loss, damage, or any other undesirable event. Most people and organization desire low or minimized risk, which would translate to stand to a scenario of high probability of success, profit, or some form of gain. This work shows the importance of risk analysis when it comes to compare two capital investment projects in the natural gas transmission business. A transmission company needs to choose between two alternatives for capacity expansion of a pipeline, with a maximum value for the transmission tariff previously agreed to the shipper. At first, the transmission tariff is calculated by the conventional method that comprises iterative calculation from an arbitrary value, until the project Net Present Value (NPV) reaches zero. Once calculated, the lower of the transmission tariffs associated to the two expansion projects indicates the best choice. That’s the way the majority of companies perform their economical analysis of the proposed problem. Monte Carlo Simulation risk analysis technique is a powerful tool to asses the risk associated to a capital investment project, which can be summarized as the probability of undesired results. The risk calculation is based on the uncertainties associated to the input data used to build the project free cash flow, and the simulation produces a frequency distribution, or histogram, for, the NPV of a project. As will be seen in the work, the investment with the largest expected NPV may not always be the best investment alternative.
Reports on the topic "Return on Net Investment Cash Flow"
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McCullouch, Bob. INDOT Research Program Benefit Cost Analysis—Return on Investment for Projects Completed in FY 2019. Purdue University, 2020. http://dx.doi.org/10.5703/1288284317279.
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To demonstrate the value of research and its implementation, the Governor’s Office requested an annual financial analysis of the INDOT Research Program to determine the return on the research investment (ROI). This report is for the 35 research projects that completed in FY 2019. The ROI analysis will supplement the annual IMPACT report by adding a more rigorous quantitative benefit cost analysis (BCA) to the Research Program. Previous financial analyses used the approach of calculating net present values of cash flows to determine a benefit cost ratio and this report uses the same approach. Additionally, an overall program rate of return (ROI) is reported and will be accumulated over time into a rolling 5-year average. The ROI is expressed as a BCA ratio, which is commonly used by State DOTs and national transportation research agencies when expressing the return on the research investment. By using total program costs in the analysis, rather than just the individual project cost, a very conservative BCA ratio is obtained. Interestingly, the quantified cost savings from a single project frequently underwrites the cost of the entire research program in a fiscal year.
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McCulloch, Bob. INDOT Research Program Benefit Cost Analysis—Return on Investment for Projects Completed in FY 2020. Purdue University, 2021. http://dx.doi.org/10.5703/1288284317265.
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To demonstrate the value of research and its implementation, the Governor’s Office requested an annual financial analysis of the INDOT Research Program to determine the return on the research investment (ROI). The current financial analysis is for research projects that completed in FY 2020. Analyses on previous year’s projects is necessary primarily due to the time it takes some project outcomes to be implemented, extending into the following year. Therefore, the FY 2020 analysis is completed in calendar 2021. The ROI analysis will supplement the annual IMPACT report by adding a more rigorous quantitative benefit cost analysis (BCA) to the Research Program. Previous financial analyses used the approach of calculating net present values of cash flows to determine a benefit cost ratio and this report uses the same approach. Additionally, an overall program rate of return (ROI) is reported and will be accumulated over time into a rolling 5-year average. While the quantitative benefit cost analysis (BCA) was rigorous, results are limited to projects where benefits and costs could be quantified, where data is available to perform a quantitative analysis. Qualitative benefits are highlighted in the companion annual IMPACT report (https://www.in.gov/indot/files/Research-Program-Impact-Report.pdf ). In 2018, INDOT unveiled its new Strategic Plan. The Strategic Plan guides the priority research needs of the Research Program and in turn the research results support accomplishing the INDOT Strategic Plan, Strategic Objectives. A new Strategic Objective has been added to the INDOT Strategic Plan addressing Innovation & Technology. Additionally, INDOT created a new Office of Innovation. While the Research Program supports all of INDOT’s Strategic Objectives, these new initiatives have further highlighted the importance of research and its role in achieving the Strategic Objectives outlined in the new INDOT Strategic Plan. There has been more emphasis of new research needs related to new technology changes and transformational technologies. This will help position INDOT for future growth, adoption of new technologies and partnering opportunities. These new research projects will provide large qualitative ROI, however are difficult to quantify due to their complexity and newness.