scholarly journals Assessing the non-financial investment profitability with variable discount rate

2015 ◽  
Vol 6 (4) ◽  
pp. 123
Author(s):  
Katarzyna Gwóźdź
Keyword(s):  
Discount Rate ◽  
Risk Premium ◽  
Financial Investment ◽  
The Subject

In the work, the subject of the discount rate assessment is presented. The discount rate is usually considered as constant in the whole investment period, which seems to be the main problem. The constant discount rate does not take into account the actual money loses value in time. Moreover, the discount rate elements can change in time, and it should be remembered that many factors, which could also change, influence the value of those elements. The research confirms that the assumption of using the constant discount rate is erroneous. In the work one can find i.a. the methods of own capital assessment or the proposal of different techniques of risk premium valuation.

RATE OF COSTS ON INVESTMENT CAPITAL IN EMERGING MARKETS

2019 ◽  
Vol 6 ◽  
pp. 665 ◽  
Author(s):  
Oleg Tereshenko ◽  
Nataliya Voloshanyk ◽  
Dmytro Savchuk
Keyword(s):  
Emerging Markets ◽  
Discount Rate ◽  
Capital Market ◽  
Risk Premium ◽  
Emerging Market ◽  
Weighted Average ◽  
Capital Costs ◽  
Investment Capital ◽  
Capm Model ◽  
Risk Free Rate

To date, there is no adequate methodology for calculating the discount rate that would satisfy most financial analysts. The most common approach to determining the discount rate is to use the weighted average cost of capital (WACC) algorithm. The calculation of capital costs (discount rates) in emerging market countries (EM) is characterized by a number of problems related to the information inefficiency of the capital market, instability of demand for products, inflation, macroeconomic and legal uncertainty and a lack of proper payment discipline. Even more complex are the corresponding calculations during the financial crisis, accompanied by hyperinflation, a fall or significant fluctuations in the rate of the national monetary unit, trade wars, and the collapse of the banking system.Especially problematic for emerging markets is the calculation of the cost of equity (investment) capital. In developed markets, the classical CAPM model is used for these purposes. Taking into account the lack of an effective capital market in EM-related countries, it is quite difficult to determine the standard parameters of the model (risk-free rate of return, market risk premium, beta factor). Significant problems also lie in the sources and shadow schemes for paying high premiums for the risks of investing capital in EM. The aim of the paper is to substantiate recommendations on the procedure for calculating the rate of costs for own (investment) capital, taking into account the specifics of corporate activities in countries related to EM. 

scholarly journals Decision Making and Truck Operating Costs on Haulage Business in Lagos, Nigeria

2020 ◽  
pp. 28-37
Author(s):  
Christopher Adesola Wojuade ◽  
Jubril Oladosu
Keyword(s):  
Operating Cost ◽  
Cost Effective ◽  
Business Owners ◽  
Operating Costs ◽  
Maintenance Cost ◽  
Financial Investment ◽  
The Subject ◽  
Fleet Operations ◽  
Regular Training ◽  
Structured Questionnaire

Aim: To evaluates how managers take decisions on variable components of freight operation and its effects on truck operating costs in haulage business in Lagos, Nigeria. Study Design: The structure of this paper is a descriptive design. It identified a gap in knowledge and employed a structured questionnaire to obtain useful information that gives a clearer understanding of the subject in a new environment. The data collected was analysed using descriptive statistics. Place and Duration of Study: Haulage companies operating in Lagos, Nigeria between June and August 2019. Methodology: The population study is 2154 staff drawn from the eight purposively selected registered haulage companies in Lagos, Nigeria. A structured questionnaire was randomly administered on 337 personnel involved in freight operations. The questionnaire survey was conducted to obtain information on company’s expenses and policy decisions on truck operating components. Result: The decision to use new truck reduces fuel consumption and maintenance cost of haulage business. Furthermore, remunerating drivers in salary is cost effective, regular training of drivers improves their performance while high empty return trips leads to revenue loss. Business owners take decisions on huge financial investment while managers handled those that are directly related to daily fleet operations. Conclusion: The study concluded that decisions on components of freight operation increases truck operating cost of the haulage companies in the study area. The study therefore recommends policy actions that will enhance productivity of haulage companies through effective decisions.

Emerging Technologies

2019 ◽  
Author(s):  
Richard Susskind
Keyword(s):  
Artificial Intelligence ◽  
Emerging Technologies ◽  
Access To Justice ◽  
Technological Transformation ◽  
Financial Investment ◽  
The World ◽  
Human Effort ◽  
The Subject ◽  
Moderate Change

By 2030, and possibly much sooner, our courts around the world will have been transformed by technologies that have not yet been invented. I cannot of course prove this, but given the scale of the financial investment and human effort being directed at court technology and at artificial intelligence (AI), this seems to me a far more likely outcome than the moderate change that most lawyers and judges might project. Today, we are surely at the beginning of an inevitable technological transformation in our court and judicial services. In this fourth and final part of the book, I go much further and predict wider developments for online courts. First, in this and the next two chapters, I explore various emerging technologies and consider their likely impact on online courts. Second, whatever technologies may be involved, the most ambitious use of online courts will be their deployment in increasing access to justice across the globe. That is the subject matter of the final chapter of the book.

scholarly journals Saliva Crystallization in Sheep Subjected to Estrus Induction and Synchronization Protocols

2019 ◽  
Vol 48 ◽  
Author(s):  
Andressa Silveira Gonçalves ◽  
Ender Rosana Oberst ◽  
Raquel Fraga e Silva Raimondo
Keyword(s):  
Random Phase ◽  
Estrus Cycle ◽  
Device Removal ◽  
Financial Investment ◽  
Bodily Fluids ◽  
Implant Placement ◽  
Simple Alternative ◽  
The Subject ◽  
Intravaginal Device ◽  
Synchronization Protocol

Background: The crystallization of bodily fluids, primarily saliva, has been the subject of study in many species and is a simple alternative to detect estrus because it demands neither a significant financial investment nor qualified professionals to execute the examination. Fern pattern crystallization has been described in the cervical and nasal mucus, saliva and tear secretion, and in colostrum. Changes in salivary crystallization during the reproduction cycle are related to different hormonal concentrations in this period. Thus, the present study has evaluated the patterns of saliva crystallization in sheep subjected to estrus induction and synchronization protocols. Materials, Methods & Results: The sample consisted of 11 crossbreed Corriedale sheep, which were evaluated during two experimental periods (spring and autumn), and that underwent induction and synchronizing estrus protocols. In a random phase of the estrus cycle (day 0), each sheep was implanted with an intravaginal device (Primer®), impregnated with 0.36 g of progesterone for seven days. This device was inserted according to manufacturer’s instructions of the manufacturer and with the assistance of a specific applicator. On the day of device removal (day 7), the animals received 0.0375mg of D-Cloprostenol (Prolise®) and 10 mg of Folltropin extracted from the swine pituitary (NIH-FSH-P1 of Folltropin-V - Folltropin®) by intramuscular administration. The saliva was collected at six points during the experimental periods: day 1 (3 days before placement of the implant); day 4 (day of insertion of the implant); day 9 (5 days after the insertion of the implant); day 11 (day of removal of the implant and application of hormones); day 12 (24 h after removal of the implant [presumable estrus]); and day 13 (48 h after removal of the implant). Smears containing 10µ L of saliva were observed under an optical light microscope (200 x magnification) for assessment of saliva crystallization. Salivary crystallization was classified in scores from 0 to 3 based on the extent of crystallization observed in the slide, also considering filling of the observation field (x 200) and type of arborization pattern observed, as follows: 0 = without crystallization; 1 = too little crystallization; 2 = low crystallization; and 3 = large amount of crystallization. The patterns of crystallization found in sheep demonstrated an increase in quantity, diversity, definition, and size of sheets as the period of estrus approached and were different than those tipically described in the literature. Patterns of salivary crystallization followed the phases of the estrus cycle defined by the estrus induction and synchronization protocol.Discussion: Salivary crystallization in the sheep used in this study exhibited patterns that were different than those typically described in the literature. In the spring, salivary crystallization score demonstrated variation from day1 to 11 of the protocol, when the predominant hormone was progesterone released by the implant (diestrus). However, in Autumn, on day 4 (implant placement day), an increase in crystallization score was noted. This may have occurred because the sheep were in the reproductive season and therefore, may have been nearing seasonal estrus before placement of the implant. The patterns of crystallization found in sheep demonstrated an increase in quantity, diversity, definition, and size of sheets as the period of estrus approaches and showed patterns that were different than the ones usually described in literature. The patterns of salivary crystallization followed the phases of the estrus cycle defined by the estrus induction and synchronization protocol.

Microstructure of asset prices, property income and discount rates in the Tokyo residential market

2017 ◽  
Vol 10 (4) ◽  
pp. 552-571 ◽  
Author(s):  
Chihiro Shimizu
Keyword(s):  
Discount Rate ◽  
Capital Markets ◽  
Risk Premium ◽  
Asset Price ◽  
Asset Markets ◽  
Residential Property ◽  
Content Type ◽  
Share Prices ◽  
Enterprise Value ◽  
Investment Returns

Purpose The purpose of this paper is to decompose and measure the microstructure of property investment returns for Tokyo’s residential property markets in as much detail as possible in comparison with office market. Design/methodology/approach Using enterprise value data for property investment trust companies composed of share prices available on capital markets, this study proposed a method of estimating property investment returns corresponding to changes in capital markets, and clarified the distortion in capitalization rate that are formed based on property appraisal prices. Findings The results for residential property showed that as building floor space increased, income and price increased while the discount rate decreased. In particular, a higher return could be obtained from office property than residential property by investing in larger-scale properties. Building age lowered asset price and income for both residential and office property, especially for residential property. Research limitations/implications In Japan, investors believe that investment returns are high for properties close to the city centre, relatively new properties and those with large design or floor space. Therefore, this study first measured how asset prices, income and asset price–income ratios that comprise property investment returns change based on differences in these property characteristics. Second, the reliability/distortion of information that can be observed on the property investment market was measured. Furthermore, there was a significant divergence between discount rates and risk premiums formed by asset or space markets versus capital markets. Practical implications The differences of discount rate and risk premium formed by asset markets versus capital markets indicate that appraisal prices have biases. Thus, when it comes to property investment decisions, it is essential to make active use not just of property investment returns based on appraisal prices formed by asset markets but also information formed by capital markets. Social implications A greater difference was generated in a shrinking market, suggesting that analysing property returns estimated on asset market information alone could lead to erroneous investment decisions. Originality/value This research is the first to use the enterprise value data from real estate investment trust companies composed of share prices available on capital markets for calculating discount rate and risk premium in property market.

scholarly journals The Entrepreneurial Social Discount Rate: Risk Premium and Loss Aversion in New Ventures

2021 ◽  
Vol 16 (4) ◽  
pp. 1-24
Author(s):  
David Ceballos Hornero ◽  
Samuel Mongrut Montalván
Keyword(s):  
Discount Rate ◽  
Loss Aversion ◽  
Risk Premium ◽  
New Ventures ◽  
Precise Determination ◽  
Social Utility ◽  
Social Discount Rate ◽  
Government Officials ◽  
The Social

We derive a mathematical extension of the social discount rate (SDR) in such a way that we can valuate intergenerational startups financed with personal and government funds at the aggregate level. The results imply that the precise determination of the SDR can change the financial priority of investment. Therefore, we recommend government officials to include factors of economic growth (wealth effect), intergenerational prevention (precautionary effect), loss aversion, and the specific risk of the business in the valuation of new ventures and in the estimation of the social discount rate to be more representative of the social utility. Our contribution lies in including a risk premium from the firm’s average non-systematic risk and the loss aversion of a representative investor in estimating the SDR.

scholarly journals Calculating the Social Opportunity Cost Discount Rate

2011 ◽  
Vol 2 (03) ◽  
pp. 1-10 ◽  
Author(s):  
David F. Burgess ◽  
Richard O. Zerbe
Keyword(s):  
Discount Rate ◽  
Opportunity Cost ◽  
Rate Of Return ◽  
Economic Opportunity ◽  
Financial Cost ◽  
Cost Rate ◽  
The Social ◽  
The Subject ◽  
The Government ◽  
Cost Discount

Two comments in this issue of the Journal address our recent article in Volume 2, Issue 2. The fundamental issue with both comments is that they confuse the financial rate of return with the opportunity cost rate of return and therefore advocate for an inappropriate basis on which to calculate the government discount rate. That is, both comments confuse the financial cost of funds, or the borrowing rate, with the economic opportunity cost of funds. We hope that this exchange advances the subject by reducing confusion.

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