Cash Flow Method Research Articles

Environmental impacts and economic feasibility of end of life photovoltaic panels in Australia: A comprehensive assessment

The severe challenges of the end-of-life management of photovoltaic panels are predicted to enter its critical stage in Australia from the early 2030s owing to the wide-reaching deployment of PV panels in the past two decades. There appears to be a lack of holistic strategy concerning the environmental impacts of disposal scenarios and also enacting of comprehensive local policy and regulations. As a way forward in the promotion of the sustainable management of this complex waste flow, this study performed an inclusive life cycle assessment utilizing SimaPro 9.0.029, and an economic feasibility analysis employing the Discounted Cash Flow (DCF) method for various scenarios. The performed LCA in this paper highlighted the environmental burden and credit responsibilities of an industrial scale treatment procedure proposed for Australia. Findings from the analysis indicated that the domestic treatment of EoL PV module is feasible and includes high-profit margins while making a considerable reduction on environmental burdens and resource losses. The outcome of the economic feasibility assessment has shown some promising numbers for 20,000 tonnes per year of annual PV waste flow. Hence, the variation of the critical economic factors could not affect the feasibility of the treatment pathway. However, the plant with a yearly capacity of 10,000 tonnes EoL PV panels did not show profitability at any condition unless the Australian government considers a special tax-exemption during the loan lifetime. Finally, this study illuminates toward the sustainable management of EoL PV panels and circular economy pathway by providing useful concrete evidence to the decision-makers.

АКЦИЯДОРЛИК ЖАМИЯТЛАРИНИНГ КАПИТАЛ ҚИЙМАТИНИ БАҲОЛАШДА ЧЕГИРМАВИЙ ПУЛ ОҚИМЛАР УСУЛИДАН ФОЙДАЛАНИШДАГИ МУАММОЛАР

The article outlines the theoretical aspects of using the discounted cash flow method to evaluate the capital cost of a joint-stock company with special emphasis on the use of the relative income method used in developed countries. In particular, based on the data of the joint-stock company «Qvartz» for the period from 2015 to 2018, the market value, book value and dividends of joint-stock companies were analysed, and the market value of the capital calculated. In addition, the study provides an analysis of multiplier ratios that are widely used in the world in evaluating the investment attractiveness of joint-stock companies. This, in turn, reflects a fundamental analysis in assessing the cost of capital of a joint-stock company. The study identifies the existing problems in using the discounted cash flow method in evaluating a joint-stock company and develops scientific proposals and practical recommendations for their solution.

Non-Executive Chairman, Audit Quality and Earnings Management

The purpose of this paper is twofold, first, it examines the association of non-executive chairman and the quality of financial earnings and second, it examines the role of audit quality and non-executive chairman in earnings quality. This paper uses the modified jones model and the performance adjusted modified Jones model considering two cash flow methods of total accrual and perform regression analysis on the energy sector firms from the year 2010-2012. The study result does not find any significant association of earnings management and non-executive director and audit quality in the Australian context. This finding raises concerns regarding the effectiveness of such a corporate governance mechanism to maximize monitoring over the operation of the firm.

Performance assessment and statistical modeling of modification and adsorptive properties of a lignocellulosic waste modified using reagent assisted mechanochemical process as a low-cost and high-performance method

In this study, olive stone (OS), one of the largely-gathered agricultural wastes, was investigated as an adsorbent in modified and less efficient raw form in order to remove trace elements that have negative effects on human health and environment. Citric acid (CA) assisted mechanochemical modification method (MCM) proposed as an alternative to traditional chemical modification was presented as an innovative approach with advantages of being an easy-to-use, low-cost and eco-friendly technology. As an effective adsorbent, modified olive stone (M-OS) was used for removing Cu2+, Pb2+ and Zn2+ metals from aqueous solutions. Kinetic analysis was fitted with Pseudo-second-order model and equilibrium data with Langmuir model. Adsorption capacities were found as 3.49, 4.67, 2.50 mg/g with OS, and 10.10, 21.28, 18.18 mg/g with M-OS for Cu2+, Pb2+ and Zn2+ respectively. The removal efficiencies of all metals were above 94% for modified adsorbent in optimum conditions (Co: 0.30 mM, pH: 5.40, and m: 0.300 g). According to thermodynamic parameters, adsorption process was spontaneous and endothermic for both adsorbents. Activation energy values indicated that nature of adsorption process was physical for OS and chemical for M-OS. In desorption and reusability studies, removal efficiencies were found as 40% and below in third cycle. In addition, financial advantages of method were revealed by cash flow and alternative selection cost analysis methods. As a result, the applied modification method was proposed as an effective, economical and green technology for modification of similar materials in today's conditions, where it is important to achieve high efficiency with lower cost.

Valoração de Propriedade Intelectual para a Negociação e Transferência da Tecnologia: O caso NIT/IFBA

The purpose of this research was to analyze patent valuation methods discussed in the literature, and to value the fish smoker patents (UM 8802959-0) of the Center for Technological Innovation of the Federal Institute of Education, Science and Technology of Bahia - NIT/IFBA. The adopted methodological procedures consisted of an exploratory research of bibliographic and documentary nature, which was based on scientific papers, dissertations, theses, technical reports and institutional websites. The approach used in this research was the qualitative research, with a qualitative and quantitative data analysis. Regarding the data, secondary data were collected from a patent document, and through direct observation performed at NIT/IFBA. As a result of this study, it was observed that the alternative valuation method, which takes into account the characteristic of the asset as well as the Technological Readiness Level (TPN) and economic variables, was the most favorable one to value the fish smoker of the NIT/IFBA when compared to traditional approaches, such as Discounted Cash Flow method (DCF), real options and cost approach. Also, the alternative valuation method was more advantageous because it took into account the particularities and dynamics of the NITs as it required data which are accessible to the Centers, and it also exhibited flexibility as it was compatible with patent characteristics.

Sustainable valuation of land for development. Adding value with urban planning progress. A Spanish case study

This article presents a valuation model of land for development in a sustainable way, based on the design and execution of urban planning. Using this method, one can obtain, at any given point in time, the added value progress of the urbanization process. For each year during the plan’s execution, the value of land has been estimated. The free cash-flow method was applied in order to estimate the land valuation of any given year. From the estimate for each of those years, and using regression analysis, the most suited value added function was obtained, for the increase of value across time up to the point of finalized, fully urbanized land. The results show that this is an exponential growth function, such that during the initial years the progress of valuation is slow, but it accentuates during final years of execution as the land becomes urbanized, at which point the land achieves maximum value.

The Re-emergence of the Residual Income Model in the Valuation of Firms and Investment Projects

Residual income valuation was already known and used in valuation theory and practice previously, however, the method has been subject to increasing attention in the past decades. By comparing the discounted cash flow method and the residual income model, this paper seeks to answer the question of what practical implications the difference in theory results in. the discounted cash flow method continues to be widely popular in literature and international practice, however, it may give rise to flawed results in certain cases. with the help of specific business examples, the study highlights that in such cases, the risks of under or overestimation can be mitigated with the help of the rim model. the largest benefit of the residual income model compared to the dcf method is that instead of deriving the value solely from the future, it gives a central role to the already known book value, and the speculative value – determined based on the accounting income – plays a less significant role in the course of valuation.

ОЦЕНКА ВЛИЯНИЯ ИННОВАЦИОННЫХ ПРОЕКТОВ НА РЫНОЧНУЮ КАПИТАЛИЗАЦИЮ КОМПАНИЙ: ПОДХОДЫ И ПОКАЗАТЕЛИ

The growth of innovative activity of enterprises is a problem of the modern economy. Effective enterprise innovation management must ensure long-term competitive advantage and financial sustainability. This requires the search tools capable of updating the resource potential of the enterprise. Research shows that project management is such a tool. With organizational isolation, a defined budget, established goals, the project provides intensive and targeted changes to the subject area, as well as the ability to assess the effectiveness of innovation. The author proposes a system that reflects not only current, but also promising indicators for each type of effect. In particular, economic efficiency includes not only indicators traditionally used to evaluate projects, but also indicators such as growth of client capital, profitability of costs for commercialization of innovations and others. The article provides indicators for other types of effects of the innovative project. Turning to the problem of assessing the integral effect of innovation, the author concluded that the most approaches is based on the generalization by various methods of indicators reflecting private types of efficiency. The author proposes to consider as an integral indicator the growth of market capitalization of business. The indicator can characterize the influence on the results of innovation of factors of the external environment, their dynamics. For calculate the indicator, it is proposed to use the discounted cash flow method, which can reflect the instability of cash flows during the period of innovation activity. Additionally, by applying the method of accumulation of assets, it is possible to establish growth or reduction of market capitalization due to change of the property complex of the enterprise.

The evaluation of venture capital investments using real option approach

THE AIMS OF THE PAPER This study attempts to explore the links between venture capital (VC) investments and the real option approach (ROA) with analyzing the characteristic features of the venture capital investments and their process. The real options can be examined as a way of thinking and evaluation method and the study’s aim is to show that real option approach can provide an answer to the valuation challenges of venture capital investments. METHODOLOGY The choice of the appropriate valuation method requires consideration of its conditions of application, which, in the case of real option theory, result from the examination of uncertainty, flexibility and irreversibility. The venture capital investments are characterized by a high degree of uncertainty and risk, which can also be traced back to the provision of financing to innovative, early-stage companies. Real option theory also provides venture capital investors with professional experience through their active role in decision-making. The study evaluates a Hungarian start-up company venture capital investment with the help of a traditional discounted cash flow method and two real option valuation models: Black – Scholes model and binomial pricing model. Then a sensitivity analysis is prepared to analyze the value driver effect on option value and a volatility analysis to verify the importance of high-degree of uncertainty in real option valuation. MOST IMPORTANT RESULTS The paper concludes that the option-based valuation methods are more suitable for evaluating venture capital investments than other approaches such as the discounted cash flow methods, and the embedded flexibility can be determined by the real option approach. The binomial pricing model points out the advantages of staging investments with the higher real (call) option value. Besides the real option valuation, the sensitivity analysis shows a positive effect of the present value of the underlying assets, the time to maturity, the risk-free interest rate and volatility on the call option value. The analysis of the volatility emphasizes the importance of the degree of uncertainty in real option valuation. RECOMMENDATIONS The real option approach ensures proper evaluation of venture capital investment, avoiding the undervaluation and taking advantage of staging and timing investments in practice. Acknowledgment: Supported by the UNKP-19-3 New National Excellence Program of the Ministry for Innovation and Technology.

ЦІЛІ ТА МЕТОДИ ОЦІНКИ БІЗНЕСУ У МОРСЬКІЙ ГАЛУЗІ

The business appraisal process is described in many works. It states that the main purpose of the assessment process is to identify critical business areas that create value. In which publications are investigated the methodological foundations for assessing the value of property. The problems of different approaches to the assessment of property objects in seaports are described. But there is a lack of comprehensive business valuation studies in other sectors of the maritime industry, such as onshore services.The aim of the work is to study the goals and methods of assessing the value of a business in various areas of the maritime industry, taking into account their specifics.Business valuation is a multilevel complex process. When evaluating a business, it is necessary to audit and sometimes revalue all the assets of the company. It is necessary to build forecasts for a certain time interval.Before starting the business appraisal process, it is necessary to take into account certain key factors: economic factors (profitability and risks), political factors (lack of a stable and predictable situation in the industry), social factors (personal reasons of customers and consumers of appraisal), information factors (for correct estimates need reliable information). The need to assess the value of a business arises in almost all transformations: when buying and selling an enterprise, its corporatization, mergers and acquisitions, as well as in many other situations.There are situations when the need to assess those specified in the law. Basically, these cases concern the appraisal of state property.There are many other situations where an assessment needs to be made. These include: buying − selling a company, making management decisions, determining the amount of tax on the company's property, insuring the company's property, obtaining a loan, investing.A properly performed appraisal is also a monitoring of the company's performance and revaluation of the property's value. Therefore, it is important to ensure that the financial data to be evaluated is complete, current and accurate. Only with reliable data and a well-planned strategic approach can a reliable forecast be made. The more complete and detailed the data for analysis are, the more accurate and qualitative the results of the assessment will be.The most common valuation method is the discounted cash flow method. Its advantage is the ability to measure future results today. This is a complex expert method, but it provides information about the business prospects.

Die Auswirkungen der COVID-19-Pandemie auf die zur Anwendung kommenden Diskontierungsverfahren im Rahmen der Unternehmensbewertung

The COVID-19 pandemic has a drastic impact on the entire global economy. In the following article, the impacts of the crisis on business valuation are presented. The focus is on the valuation parameters of the discounted cashflow method, in which the business value is the present value of future cash flows regarding on the valuation date.

FİRMA DEĞERLEME YAKLAŞIMLARI VE TÜRK HAVA YOLLARI (THY) ÜZERİNE BİR UYGULAMA

Bu çalışma kapsamında, rekabet koşullarının her geçen gün zorlaştığı küresel finans pazarında önemini giderek daha da arttıran firma değerleme kavramı ele alınarak, öncelikle konuyu işleyen çeşitli çalışmaların derlendiği bir literatür taraması yapılmış, ardından havayolu ulaşımı sektöründe faaliyet gösteren Türk Hava Yolları şirketi için bir firma değerleme uygulaması anlatılmıştır. Söz konusu değerleme için yöntem olarak indirgenmiş serbest nakit akım ve benzer şirket yöntemleri kullanılmış ve elde edilen sonuçlar tutarlılık açısından kıyaslanmıştır. Değerleme hatasının minimum düzeyde tutulması ve hissenin gerçeğe yakın değerine ulaşılması için, değerlemede mümkün olduğunca çok yöntemin karşılaştırmalı olarak kullanılması önerilmektedir. Ayrıca, sağlıklı bir değerleme sonucu elde edebilmek için, değerlemede kullanılacak yöntemin seçim ve uygulama sürecinde firmanın ve firmanın faaliyet gösterdiği sektörün spesifik özelliklerinin hassasiyetle dikkate alınması gerektiği de düşünülmektedir.

A comparison of pricing models for mineral rights: Copper mine in China

Purchasing mineral rights to allow a corporation to extract minerals is a large investment and potentially very profitable. Generally, the assessment and valuation process is conducted by an official organization at the nation's governmental level. From a corporation perspective it is thus crucial to calculate an accurate value of the right to exploit a mineral product or what we call “mineral right”. In this work we compare three valuation methods and we compare their results in case of pricing a copper mine in China. We explain and apply the official valuation method based on a simple Discounted Cash Flow (DCF). We present what we believe is a more accurate valuation based on the term structure of future mineral prices: the so called modified Discounted Cash Flow (mDCF) method. Finally, we contrast with a method based on real options which considers the mineral right as a swaption. We implement two real options models: the classical Black model and a more modern Miltersen and Schwartz model. We highlight and discuss differences and commonalities between the three valuation methods. Finally, we make a recommendation for future financial reporting based what we learn from the three methods.

Techno-economic assessment of microbial limonene production

To satisfy the growing demand for limonene, novel pathways for microbial production of limonene have been sought. A techno-economic analysis is carried out for one such process producing limonene from sugar at an industrial plant scale to assess potential economic viability. A conceptual design of the process is developed, in which a gas stripping-solvent scrubbing method is chosen for recovering limonene from bioreactors based on consideration of payback time and process operability. Minimum limonene selling prices are estimated over a range of fermentation productivity based on the calculation of net present value using discounted cash flow method. Under 45% of the maximum theoretical yield, the selling price reaches $19.9/kg, which could be competitive with established production processes when fermentation productivity is above 0.7 kg/(m3·h). Reduction of cost could be realised through improvement of microbial strains, utilisation of cheaper feedstocks, reduction in capital investment and strategic business planning.

The ways of the defense products pricing system development

The article is devoted to one of the constantly discussed topics of development of the military-industrial complex – the directions of development of the pricing system for defense products [1, 2]. The main methods of pricing used in the military economy are highlighted. The ways of the pricing system development based on statistical and engineering methods of analysis of the influence of various technological factors are considered, the tendency of transition to the methods of «full» valuation of products with no connection to labor intensity is shown. The discounted cash flow method is considered as one of the methods of contract profitability estimation. The necessity of the creation of a modern effective pricing system based on an innovative-institutional approach is shown. It is indicated that the new pricing system will require the restructuring of organizational structures of enterprises with the inclusion of fundamentally new elements.

Techno-Economic Analysis of Natural Gas-Based Polygeneration System of Electricity, Cooling, and Heating

Some remote and rurar areas in Indonesia have low electrification levels and this poses a undermines their economic development potential. In response to the aforementioned challenges, it is necessary to develop an integrated energy system that produces multi-utilities (polygeneration) in producing energy to meet local needs. The aim of this work is to investigate the technical and economic analysis on a polygeneration system of a gas-fired power plant to produce electricity and heating, and to be integrated with an LNG regasification system for the utilization of cold energy as well. This polygeneration system is located in Manokwari District, West Papua. The polygeneration system was simulated using Unisim Design R390.1 to evaluate the technical performances and its economic analysis was done by using cash flow method with several business schemes, financial and fiscal incentives. The results showed that technically the polygeneration system is able to increase the efficiency of power generation system of a stand-alone power plant, from 32.9% to 59.7%. Economically, the polygeneration system can reduce the electricity tariff of a stand-alone power system from 19.32 US cents/kWh to 12.31 USD cents /kWh.

The real options method applied to decision making – an investment analysis

Goal: This study aims to assess the impact of using the method of real options in investment analysis through a case study on a retail firm.
 Design / Methodology / Approach: It was targeted the applications of the real options method in a different type of environment and it was compared to another method more commonly used, the discounted cash flow method (DCF). The implementation and assessment of the real options method was investigated by means of a case study conducted in an investment analysis in a retail units firm.
 Results: The use of the real options method showed a more concise applicability over the DCF method. The results show that the project’s value, after the inclusion of managerial flexibility, increased significantly, which indicates that the analysis of the discounted cash flow undervalued the investment in question, since it disregarded the flexibility to expand or abandon the project.
 Limitations of the investigation: The presented method is proper to long-term processes where it is possible to make changes during the project. Investments in this sector usually are more related to short and medium-term decisions, making the application difficult due to the short decision-making period available to the managers.
 Practical Implications: The study provided the incorporation of flexibility through different pathways during the building project in a retail units firm. It was showed different scenarios where practitioners could decide among expanding, proceeding, reducing or abandoning the retail units based on the characteristics of their investments.
 Originality/value: The results obtained are an indication of this methodology to industrial businesses that are relatively volatile and that need a certain degree of flexibility in order to burgeon, such as the case of the retailing sector.

PROCEDURE OF CURRENT VALUE EVALUATION OF THE CREATED TRADE MARK OF THE COMPANY

Introduction. Market conditions define the brand as one of the levers that affects the competitiveness and value of the company's business. Trademarks, which have been created, are not recognized as assets on the company's balance sheet and are not included in the value of the business when in the financial statements, are disclosed. A number of issues remains to be resolved. They are connected with the analytical procedure for understanding the impact of the created brand on the value of the company's business by external and internal users. Purpose. The article aims to develop the analytical procedure for estimating the present value of the created trademark of the company, which provides relevant information to external and internal users about the process of creating "branded" capital of the company. Method (methodology). The methods of scientific generalization have been used in substantiation of theoretical approaches to the estimation of the present value of the created trademark of the company. They are the methods of general scientific abstraction, induction and deduction methods, method of analysis and synthesis, method of analogy (to develop the proposals for the practical calculation of the value of the created trademark of the company on the information of the financial statements); free cash flow method (to determine the present value of the company's business); extrapolation method (to predict the future economic benefits of the company). Results. The exploration of issues related to the disclosure of the brand value of the business of the company in the integrated reporting or management report has been carried out. The priority of applying the revenue approach to the expert evaluation of the created intellectual property objects of the company has been determined. The expediency of using the free cash flow method to estimate the present value of the created trademark as an intellectual asset of the operating company has been substantiated. The relationship between goodwill and company brand value has been argued. It has been proposed the model for calculating the present value of company brand, which is based on the goodwill amount calculation method and the free cash flow method. It has been proposed the analytical procedure to determine the present value of the created trademark of the company in the form of a table, containing a list of analytical transactions and an analytical conclusion. The present value of the created trademark of a particular international company has been calculated.

Analysis Of The Feasibility Of Organic Pesticides Tea Through The Assessment Of Financial And Non Financial Aspects: Case Study Of Business Of Monik B-Tea Students In Medan

Utilization of agricultural products is one of the business opportunities for investors and entrepreneurs. Tea plantations are one of the leading commodities in Indonesia, where one of the producers is North Sumatra, which has three large tea gardens such as Toba Sari, Sidamanik, and Bah Butong. Utilization of tea is only limited to leaves, while tea seeds are not used which unknowingly have the benefit of being able to prevent Golden Snail pests in rice plants. So from that the need for a business that utilizes raw materials that are not worth being of economic value. Further studies and business feasibility studies need to be carried out to determine whether or not the business of organic tea pesticides is feasible in the city of Medan. This research is qualitative and quantitative, by collecting, and analyzing Monik B-Tea business financial data in Medan city. The results of the study can be determined that the results of the analysis show that the feasibility of organic fertilizer business when viewed from a non-financial aspect is feasible. From the technical, the production process uses simple techniques and equipment. From the market aspect, opportunities are still open due to high demand. And from the social aspects of the environment, organic pesticide businesses can contribute to the surrounding community. The analysis was carried out by the cash flow method, Payback Period, Benefit Cost Rational. The results of this analysis showed that the business of organic tea seed pesticides is feasible as shown by the positive final cash balance, the Payback Period which is smaller than the investment age, Cost Rational Benefit is greater than one.

Managerial flexibility role on financial investment analysis: a case study of public housing

The limitations of Discounted Cash Flow (DCF) method for capturing the opportunity value phenomenon in the uncertainty of housing investment analysis cause difficulties in the decision-making process for the investors. Flexibility factor becomes the obstacle for investors in project uncertainty. Real Options Analysis (ROA) is an important factor included in the DCF method because it offers managerial flexibility in the uncertainty of housing investment decision making. Flexibility in ROA is a right and investors do not have an obligation to respond to uncertainty in project investment. In this research, the type of flexibility on ROA used is an option to carry out promotional activities. The research results indicate that promotional activities affect the increase in Net Present Value (NPV) so that the benefits are maximized. Comparison of the results of investment analysis between ROA and DCF methods indicates an added value due to the existence of such flexibility. The investment simulation of ROA method was conducted using Monte Carlo method approach. The role of flexibility from the simulation is obtained by increasing the added value by 5.2%, and optimal promotion occurs in the first two years of investment.