Decision of Expected Basic Rate of Income for Project Financial Leasing in Power Net Construction

These guidelines, prepared for Bank-assisted Development Finance Companies, explain how to calculate financial and economic rates of return. The approach concentrates on capital productivity and efficiency, and makes no allowance for income distribution effects. The financial rate of return indicates efficiency of resource use in the context of market prices. The economic rate of return indicates efficiency of resource use when prices are adjusted to reflect relative economic scarcities. Traded inputs and outputs are valued at the border, and domestic factors of production are shadow-priced and converted into border prices. The guidelines offer a series of explanatory notes, standard tables, a note concerning the algebra of the net present value and domestic resource cost measures, illustrative case studies, a glossary of terms and a select bibliography.

Shadow price

Rate of return

Capital (architecture)

Allowance (engineering)

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Assessing Discount Rate for a Project Financed Entirely with Equity Capital

Economie teoretică şi aplicată (2007)

Nicoleta Vintilă

Estimating discount rate for an investment project is one of the most challenging tasks in capital budgeting. In this paper we discuss different kind of models for cost of equity capital proposed in finance literature (static CAPM, conditional CAPM, APT, build-up model), focusing especially on advantages and disadvantages of using each of them. In the final section, we estimate the discount rate for a certain project financed entirely with equity capital, using a version of build-up model.

Capital Budgeting

Equity

Cost of equity

Stochastic discount factor

Investment

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Investment appraisal and financing decisions : a first course in financial management

Chapman and Hall eBooks (1991)

Stephen Lumby

Traditional methods of investment appraisal the single-period investment-consumption decision model the discounted cash flow approach net present value and internal rate of return project appraisal cash flows capital market imperfections risk and expected return portfolio theory the capital asset pricing theory traditional approaches to risk the cost of company capital the weighted average cost of capital the capital structure decision capital structure in a world with tax the capital structure decision in practice investment and financing decision interactions overseas capital investments the dividend decision financial decision making in practice.

Capital Budgeting

Corporate Finance

Physical capital

Return of capital

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Comprehensive Financial Modeling of Solar PV Systems

Davide Baschieri Carlo Alberto Magni Andrea Marchioni

The adoption of a photovoltaic system has positive environmental effects, but the main driver of the choice in the industrial and commercial sector is economic profitability. Switching from acquisition of energy to production of energy is an investment with costs (e.g. leasing annual payment, O&M costs, capital expenditure) and benefits (e.g. savings in the electric bill, sale of the energy exceeding consumptions). In this work, we use an accounting-and-finance model to calculate the Equity Net Present Value in different scenarios and a sensitivity-analysis method (Finite Change Sensitivity Index) to explain the reasons for differences in results. This technique enables identifying the contribution of any input factor in the output value variation. In this way, the investor can draw attention on the most significant critical variables in the initial estimations to ensure success in forecasting.

Investment

Equity

Present value

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Citations (1)