Investment evaluation in renewable projects under uncertainty, using real options analysis: the case of wind power industry
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Published March 31, 2017
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DOIhttp://dx.doi.org/10.21511/imfi.14(1).2017.10
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Article InfoVolume 14 2017, Issue #1, pp. 96-103
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Cited by4 articlesJournal title: Problems and Perspectives in ManagementArticle title: Application of the methodology for determining the “growth poles” of the region’s industrial economy in the system of public administrationDOI: 10.21511/ppm.15(4).2017.07Volume: 15 / Issue: 4 / First page: 72 / Year: 2017Contributors: Nadiia PysarJournal title: Investment Management and Financial InnovationsArticle title: Simulative model for evaluation of investment processes in the regions of UkraineDOI: 10.21511/imfi.14(3-2).2017.03Volume: 14 / Issue: 3 / First page: 322 / Year: 2017Contributors: Ivan Blahun, Lesia Dmytryshyn, Halyna LeshukJournal title: Journal of Environmental ManagementArticle title: Uncertainty analysis of industrial energy conservation management in China's iron and steel industryDOI: 10.1016/j.jenvman.2018.07.096Volume: 225 / Issue: / First page: 205 / Year: 2018Contributors: Zongguo Wen, Yihan Wang, Chenkai Zhang, Xiaoling ZhangJournal title: Investment Management and Financial InnovationsArticle title: Economic security in investment projects management: convergence of accounting mechanismsDOI: 10.21511/imfi.14(3-2).2017.06Volume: 14 / Issue: 3 / First page: 353 / Year: 2017Contributors: Nataliia Ostapiuk, Oleksandra Karmaza, Mykola Kurylo, Gennady Timchenko
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Investment analysis is a crucial process for any investment’s success. This process can be supported by both the discounted cash flow analysis and the real options analysis. Many researchers have point out restrictions for the first one, in cases of uncertainty in the entrepreneurial environment. The main types of uncertainty, concerning the wind energy sector, include uncertainties related to the price of electriticity by RES, the public policy regulatory policies, the demand, the initial capital costs, the technological progress, the weather conditions, the political and economical situations and generally the RES market structure. In this paper, we try to find the optimal investment strategy in a liberalized global electricity market, where the price of electricity is uncertain while the other parameters are configured separately in each country. The authors consider about the factors of the time for investment and the electricity’s price level, in wind energy by using the real options theory. The authors select a variety of data for the wind energy industry from different countries in several continents, and also create a model for the investment analysis in this entrepreneurial sector.
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JEL Classification (Paper profile tab)M21
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References31
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Tables3
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Figures2
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- Fig. 1. Annual installed capacity by region 2007-2015
- Fig. 2. Market forecast for 2016-2020
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- Table 1. Public Support Mechanisms
- Table 2. Interest rates
- Table 3. Investment evaluation
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Valuing synergies in strategic mergers and acquisitions using the real options approach
Anna Loukianova , Egor Nikulin , Andrey Vedernikov doi: http://dx.doi.org/10.21511/imfi.14(1-1).2017.10Investment Management and Financial Innovations Volume 14, 2017 Issue #1 (cont.) pp. 236-247 Views: 2565 Downloads: 2679 TO CITE АНОТАЦІЯThe purpose of the current paper is to elaborate the model for assessing cumulative synergetic effect in M&A (Mergers and Acquisitions) deals on the basis of a real options approach. The majority of papers on the synergetic effects of M&A deals typically focus on a particular type of synergy, while the current paper proposes a model that accounts for the cumulative simultaneous effect of different types of operating and financial synergies. The methodology of our research is loosely based on Datar-Mathews real option valuation model, which is flexible and intuitive for practitioners. Formulae for assessing eight types of synergy typically arising from M&A deals are developed. They are integrated into a single model to assess their cumulative effect on the M&A deal using a simulation modelling approach. The method was used ex post to find synergy values in two recent M&A deals in the pharmaceutical industry, and produced sound results. The proposed approach to value target companies could be used by firms before an M&A deal in the due diligence process. Using this tool a company can build a bidding strategy and define the maximum premium it can pay for the target.
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A model for analyzing the financial stability of banks in the VUCA-world conditions
Svitlana Khalatur , Liudmyla Velychko , Olena Pavlenko , Oleksandr Karamushka , Mariia Huba doi: http://dx.doi.org/10.21511/bbs.16(1).2021.16Banks and Bank Systems Volume 16, 2021 Issue #1 pp. 182-194 Views: 2257 Downloads: 566 TO CITE АНОТАЦІЯVUСA is a chaotic and rapidly changing business environment that, based on the variability, uncertainty, complexity and ambiguity of the modern world, transforms the approach of banks to the analysis of financial stability. The aim of the paper is to improve tools for monitoring the impact of VUCA-world conditions on the financial stability of banks, namely a model for studying and analyzing the impact of the modern business space “VUCA” on the financial stability of the country's banks. To test the model, the method of constructing regression equations in multifactor regression analysis is used. For this study, data from some Eastern European countries (Ukraine, Belarus, Latvia, Lithuania, Moldova) were used, and time series data were used for 10 years from 2010 to 2019.
Having considered the definition of “VUCA-world conditions”, the model of modern business space “VUCA” was developed when analyzing the activity of banks in the studied countries. Drivers, consequences, requirements and macroeconomic indicators of the countries’ activities in the VUСA-world conditions are determined. The VUCA-world conditions also consider the study of key macroeconomic indicators that allow building long-term relationships throughout the value chain. The analysis of the studied Eastern European countries showed that with the increase of factors of GDP growth, GNI per capita growth, research and development costs, foreign direct investment, and net inflow of 1%, the effective ratio of bank capital and assets also increases. The assessment, in contrast to the existing ones, makes it possible to consider the impact of the macroeconomic environment of banks on their financial stability. -
Risk and uncertainty in concept of corporate lifecycle
Evgeny A. Kuzmin doi: http://dx.doi.org/10.21511/ppm.15(1).2017.11Problems and Perspectives in Management Volume 15, 2017 Issue #1 pp. 107-114 Views: 1315 Downloads: 324 TO CITE АНОТАЦІЯRegularly changed destructive periods in organizational development mean that the lifecycle exists. A nature of its formation hides a number of important conceptual regularities. One aspect of these trends is relationship between distribution of uncertainty and risks in lifecycle models, underlying motives of their formation and determining participation in development of organizational immunity. A closer definition of these issues is an objective of this research. The paper reviews the history of the lifecycle concept, gives its analysis and possible applications in management studies. In the analytical review of literature, there is an attempt of theoretical systematization for some provisions from the concept on consistency and continuity of stages turnover, on conditions of their identification and a nonlinear path. For discussions of the scientific community, the author presents hypotheses of the available effect of compression (density) in development stages, as well as heterogenic risk concentration. There is an assumption that economic systems have different orders for both the general and short lifecycles. Based on generalized theoretical and methodological provisions of stages in the lifecycle phases, the author attempts to combine functional and evolutionary models. The author also details distinctive features in the process of control over uncertainty and risks in the sequence of development stages.