Fund raising, cost

There are many reasons why an investor may decide to invest in an ABS or a CDO, e.g., to exploit arbitrage opportunities targeting higher returns, to move assets off its balance sheet, to raise cost effective funding, to get exposure to a variety of risk profiles, and so on. ... 

From an overall economic viewpoint, any investment proposal may be considered as an activity which initially absorbs funds and later generates money. The funds may be raised from loan capital or from shareholders capital, and the net (after tax and costs) money generated may be used to repay interest on loans and loan capital, with the balance being due to the shareholders. The shareholders profit can either be paid out as dividends, or reinvested in the company to fund the existing venture or new ventures. The following diagram indicates the overall flow of funds for a proposed project. The detailed cash movements are contained within the box labelled the project . 

The failure of the caloric ship and the financial losses incurred by his backers did not diminish Ericsson s enthusiasm for the air engine. The stationary steam engine had weaknesses It required skilled operators and incurred heavy insurance costs. Ericsson again successfully raised funds to develop a small open-cycle stationary caloric engine with only a rudimentary regenerator. For Ericsson and his backers it was a financial success. Marketed as requiring no water, it could be operated by unskilled labor and, perhaps most important of all, would not explode. 

Bountiful harvest Most plants have evolved to produce an abundance of seed as a survival mechanism. Leaving a few plants to flower and set seed will give you many more seeds than you could ever get in a seed packet, for virtually no cost. Surplus seed need never go to waste. Join a iocai gardening club and swap seed with other members—or grow piants for friends, for schools, for community gardens, or to raise funds for iocai good causes. 

Funding can be raised from a variety of sources (in rough order of increasing cost and increasing loss of control) ... 

A major part of the early stages of any investment project will involve the raising of the necessary finance for it, from internal or external sources, and at the lowest cost. A correspondingly important part of the appraisal process is therefore to examine the various sources of funds, and to try to put some relative value or cost on them. 

The funds that might be obtained from the various sources given in Section 9.4 come at very different costs - both real and virtual. If there are few sources available, then a simple calculation may be possible to determine an annual cost of the finance raised for the project, but it is more likely that a detailed analysis will have to be made. 

In 1994 Woosley raised concern about the quality and quantity of prescription drug information available to physicians and other practitioners.He contrasted the billions of dollars available from commercial interests to promote prescribing and use of (primarily new) drugs, with the limited funds available to help practitioners select cost-effective therapeutics. What was missing was a balance between commercially driven information and nonproprietary information, a vacuum that Woosley proposed would be filled by CERTs. The conceptual basis for CERTs was that of an academic entity capable of striking a balance between the relative abundance of pharmaceutical industry-generated information, and the relative paucity of NIH- or FDA-generated information available to practitioners. 

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