Investment analysis

Costing investment analysis Data acquisition Database management Data conversion Development tools Dispersion models Distillation Drafting... 

Incremental Criteria. When mutually exclusive ventures having different levels of investment are compared, an attractive concept is that each increment of investment must itself yield a satisfactory return. This concept has led to a variety of incremental approaches for profitabiUty analysis. Because the risk can vary with investment level and cloud the meaning of satisfactory, any incremental approach to multiyear investment analysis should be viewed with caution. 

Now that you have determined the likely savings in terms of annual process and waste-treatment operating costs associated with each option, consider the necessary investment required to implement each option. Investment can be assessed by looking at the payback period for each option that is, the time taken for a project to recover its financial outlay. A more detailed investment analysis may involve an assessment of the internal rate of return (IRR) and net present value (NPV) of the investment based on discounted cash flows. An analysis of investment risk allows you to rank the options identified. 

Capital Investment Analysis, 2nd ed. Englewood ClifFs, NJ Prentice-Hall Iiic. 

The values of raw materials and products can be found in trade journals such as Chemical Marketing Reporter (published by Schnell Publishing Company), European Chemical News and Asian Chemical News (published by Reed Business Information). However, the values reported in such sources will be subject to short-term fluctuations, and long-term forecasts will be required for investment analysis. 

Canada, J. R. W. G. Sullivan and J. A. White. Capital Investment Analysis for Engineering and Management. Prentice-Hall, Englewood Cliffs, NJ (1995). 

The payback period estimated above shows that the venture is acceptable, since investors in similar power plants generally want payback periods of 7 years or less. (The estimates in this chapter have been neither confirmed nor denied by Oxford Energy. A formal return-on-investment analysis would be necessary to be really accurate. This would include the financing structure of the venture, interest rates, depreciation, and tax considerations.)... 

AN EXAMPLE TO ILLUSTRATE PRINCIPLES OF ALTERNATIVE investment analysis. In making a choice among various alternative investments, it is necessary to recognize the need to compare one investment to... 

S. Waygood, S. Erler, W. Wehrmeyer and H. Jeswani, Integrated Investment Analysis Investment Implications of the REACH Regulation, Responsible Investment Eds., R. Sullivan and C. Mackenzie, Greenleaf Publishing, London, 2006, p.322. 

Various other important perspectives on the business case for the industry by others - the investor community perspective, an investment analysis piece providing a cautionary tale regarding Dow and Bhopal and potential market backlash, the scientific and NGO community perspective, and a commentary on corporate governance and sustainability. 

Editor s note The following Investment Analysis of Dow by Innovest Strategic Value Advisors is intended only as an illustration of potential investment community concerns arising from decisions that fall within the CSR/sustainability realm. While Dow Chemical is the subject of the analysis, it is not the intention of the editors to recognize all of the positive developments that have been undertaken by Dow and that are referenced elsewhere in this book.]... 

The Web can also be used to provide other value-added services to the contributors, for example, investment analysis tools. This function can be used to primarily trace and track the contributor s expected ri sk and return and monitor the markets or stocks they prefer. Software agents can act as personal investment advisors and assist contributors in their investment decisions. 

Despite the fact that formal investment analysis is infrequently used in R D decisions, the present value of dollar returns to R D across the entire industry should approximate the present value of R D costs. Although R D managers may not follow strict rales, companies whose investments do not return enough to cover the cost of capital will ultimately fail, while those whose investments return more than enough to cover the cost of capital will gradually expand their investments. 

Ouederni, B. N., and Sullivan, W. G., A Semi-Variance Model for Incorporating Risk into Capital Investment Analysis, Engineering Economist, Vol. 36, No. 2, Winter 1991, pp. 83-106. 

The economic analysis of investment alternatives generally entails the estimation of cash flows and the application of some measure of worth, such as net present value or the internal rate of return, in order to make a decision. The estimation of these cash flows requires the estimation of prices, whether they be the price of goods sold to forecast revenues or the estimation of wages to forecast labor costs. Over time these prices change. An increase in price is known as inflation, while a decrease in price is termed deflation. These concepts and their measurement are explained in this chapter. Cash flow analysis methods are revisited under the assumption of price changes, as their effects can be significant (Fleischer 1994). This is especially true when one considers after-tax cash flow analysis, as the effects of depreciation and taxes represent one of the most important aspects of investment analysis (Park and Sharp-Bette 1990). 

We will incorporate ESG issues into investment analysis and decision-making processes. 

The ESs exist in many forms, from medical diagnosis to investment analysis and from counseling to production control. Due to the advances of the last decade, today s ESs users can choose from dozens of commercial software packages. At present, we accept as routine such ESs as weather forecasting, online mapping and driving directions, and diagnostic systems for automotive repair shops. 

Any opportunity that requires capital spending is given a 3 ranking. Management will have to determine, based on an ROI (return on investment) analysis, if they want to pursue the opportunity after the event ends. 

Aspen IPE usually begins with the results of a simulation from one of the major process simulators (e g., ASPEN PLUS, HYSYS, CHEMCAD, and PRO/II), it being noted that users can, alternatively, provide equipment specifications and request investment analysis without using the process simulators. In these notes, only results from ASPEN PLUS are used to initiate Aspen IPE evaluations and only capital cost estimation is emphasized. Readers should refer to the Aspen IPE User s Guide (press the Help button in Aspen IPE) for detailed instructions, explanations, and for improvements in new versions of the software system. 

When finished with its evaluation, Aspen IPE displays a window that contains an executive summary of its results. This window is not shown here. Note that when the user presses the Tools pulldown menu, selects Options, and then View Spreadsheet in Excel, Aspen IPE is activated to prepare several spreadsheets, including the Equipment Summary, Utility Summary (available in Version 12.1), ProjSum, Executive Summary, and Run Summary spreadsheets. For the details of these spreadsheets, see the Aspen IPE User s Guide (press the Help button and follow the path Aspen Icarus Process Evaluator User s Manual —> Evaluating the Project Reviewing Investment Analysis). 

When the appropriate specifications are made. Aspen IPE computes annual operating costs, as well as a complete profitability analysis, the results of which appear in this Investment Analysis spreadsheet. These notes discuss capital cost estimation only because the spreadsheet, Profitability Analysis-l. O.xls, which is discussed in Section 17.8 of the textbook, is used to compute operating costs, working capital, and profitability measures. 

S Simulator Type Q Simulator File Name Simulator Units of N S Project Component Design Criteria Utility Specification Investment Analysis... 

It can be observed from Table 3 that all pohcies indicate it is interesting to perform minimal maintenance actions in early deterioration states. In addition, the sooner the replacement, the higher the mean availability and the hi er the expected long-run cost rate reached. In this way, decision makers may evaluate how much they may want to spend in order to obtain a gain in mean availability. This can be done by means of a return of investment analysis ROI) between two different maintenance pohcies from the solution set ... 

For the retrofit action, which does not affect the external stakeholders, the process assessment area is the most suitable boundary for sustainability analysis (Fig. 11.2). In the process assessment, the areas of improvement are the traditional economic indicators applied to retrofit design analysis. The operational results as well as the investment analysis of the proposed retrofit designs are accounted for. The operational results are the traditional indicators applied by engineers in retrofit design assessment [12]. They should be always contemplated, since after the implementation of a retrofit design those costs are going to be incurred at least for the next 5 years (minimum lifetime for a project). Regarding the operational results, several authors point out different aspects that should... 

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