Discounted cash flow analysis provides a means of relating the magnitude of expected future cash profits to the magnitude of the initial cash investment required to purchase an asset or to develop it for commercial production. The objectives of discounted cash flow analysis are to determine: < The net present value of a stream of expected future cash revenues and expenditures. < The rate of ret...

This paper analyses the effects of regulatory reforms and corporate restructuring on the firmlevel investments of telecommunications industry. A dynamic model of incumbents’ investment in network assets allows to test the explaining strength of several aspects of regulation, competition and corporate structure. The sample includes telecommunications incumbents from the enlarged European Union a...

We present a modeling framework for the analysis of investments in an oligopoly market for a homogenous commodity. The demand evolves stochastically and the firms carry out investment projects in order to adjust their production cost functions or production capacities. The model is formulated as a discrete time state-space game where the firms use feedback strategies. The firms are assumed to m...

Introduction 1 The Information Paradox 2 Review of Basic Finance 4 The Time Value of Money 4 ROI, Internal Rate of Return (IRR), and Payback Period 6 Calculating ROI for an E-business Project 6 Base Case 7 Incorporating the E-business Project 8 Incremental Cash Flows and IRR 10 Uncertainty, Risk, and ROI 11 Uncertainty 11 Sensitivity Analysis 11 Project and Technology Risks 12 Monte Carlo Analy...

This paper contains the analysis of pitfalls related with innovationbased investments valuation. Being long-term projects with high uncertainty, innovation-based investments suffer from different types of errors if traditional discounted cash flow methodology is used for their valuation. The real options methodologyis being used for a long time as an alternative view at the evaluation of such p...

maximizing economic earnings is the most common goal in cut-off grade optimization of open-pit mining operations. when this is the case, the price of the product has a critical effect on optimum value of cut-off grade. this paper investigates the relationship between optimum cut-off grade and price to maximize total cash flow and net percent value (npv) of operation. in order to visualize this ...

L Finitely many growth options 30 L.1 Optimal policy in the waiting period . . . . . . . . . . . . . . . . . . . . . . 31 L.2 Optimal strategy for a firm with a growth option . . . . . . . . . . . . . . . 34 L.3 Proofs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 L.4 Solution to Problem 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 L.5 Solu...