Investment assessment

Liroff offers a benchmarking tool to assess progress in corporate management of product detoxification. The tool can be used internally by senior corporate management teams or externally by investors and investment analysts to screen investments, assess best in class ... 

Forecast regarding the market condition s competitive situation and projected return of investment assessment may be wrong. In the case of an innovative new approach it may not be assessable and therefore results in low interest. 

Petroleum economics provides the tools with which to quantify and assess the financial risks involved in field exploration, appraisal and development, and allows a consistent approach with which alternative investments can be compared. The techniques are applied to advise management on the attractiveness of such investment opportunities, to assist in selecting the best options, and to determine how to maximise the value of existing assets. 

Land purchases and many of the costs associated with faciUty development can be accompHshed with long-term loans of 15 to 30 years. Equipment such as pumps and tmcks are usually depreciated over a few years and are funded with shorter-term loans. Operating expenses for such items as feed, chemicals, fuel, utilities, salaries, taxes, and insurance may require periodic short-term loans to keep the business solvent. The projected income should be based on a reaUstic estimate of farmgate value of the product and an accurate assessment of anticipated production. Each business plan should project income and expenses projected over the term of all loans in order to demonstrate to the lending agency or venture capitaUst that there is a high probabiUty the investment will be repaid. 

A proper assessment of the costs and benefits associated with standardization depends on having suitable baseline data with which to make a comparison. Several surveys have shown typical doUat returns for the investment in standardization in the range of 5 1—8 1 with occasional claims made for a ratio as high as 50 1. 

The ways of assessing profitabihty to be considered in this section are (1) discounted-cash-flow rate of return (DCFRR), (2) net present value (NPV) based on a particiilar discount rate, (3) eqmvalent maximum investment period (EMIP), (4) interest-recovery period (IRP), and (5) discounted breakeven point (DEEP). 

Insurance and Ri In the venture-premium method of assessment, risky investments are required to yield a rate of return that adds a premium to the cost of finance. D. F. Rudd and C. C. Watson (The Strategy of Process Engineering, Wiley, New York, 1968, p. 91) consider this relationship ... 

Obviously, the net annual profit must be clearly defined before comparisons are made with other companies. Similarly the term investment in Eq. (9-128) can have a variety of meanings. The two most common ones (used when assessing the profitability of companies as opposed to projects) are total assets and owners equity or capital employed. In the first case, Eq. (9-128) can be written as... 

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. 

Fortunately, there are some simple rules of thumb to apply when considering a ROI analysis. In fact, without even opening a spreadsheet, you can apply some criteria to assessing basic project finance information to assess whether the investment is likely worth the effort. To determine the likelihood of a positive ROI, look at the following factors ... 

When calculating the primitive ROI, it s best to establish a criterion. For example, one acceptable ROI calculation is to take an average benefit over 3 to 5 years and divide that by the initial cost to the investment. Another calculation basis, used by the U.S. DOE (Department of Energy) for P2 assessments is as follows ... 

FIGURE 16.1 Comparison of life cycle assessment and life cycle cost calculations. The result of LCA is (weighted) emissions and the present value of investment and operating costs, e.g,. in Euros. Note that in LCA calculations the present value coefficient is I, but the present value of LCC is always affected by interest rate and the length of the period. ... 

Capital Project Review and Design Procedures (for new or existing plants, expansions, and acquisitions) Appropriation request procedures Risk assessment for investment purposes Hazards review (including worst credible cases)... 

Thus, tlie focus of tliis subsection is on qualitative/semiquantitative approaches tliat can yield useful information to decision-makers for a limited resource investment. There are several categories of uncertainties associated with site risk assessments. One is tlie initial selection of substances used to characterize exposures and risk on tlie basis of the sampling data and available toxicity information. Oilier sources of uncertainty are inlierent in tlie toxicity values for each substance used to characterize risk. Additional micertainties are inlierent in tlie exposure assessment for individual substances and individual exposures. These uncertainties are usually driven by uncertainty in tlie chemical monitoring data and tlie models used to estimate exposure concentrations in tlie absence of monitoring data, but can also be driven by population intake parameters. As described earlier, additional micertainties are incorporated in tlie risk assessment when exposures to several substances across multiple patliways are suimned. 

Expenditure on corrosion prevention is an investment and appropriate accountancy techniques should be used to assess the true cost of any scheme. The main methods used to appraise investment projects are payback, annual rate of return and discounted cash flow (DCF). The last mentioned is the most appropriate technique since it is based on the principle that money has a time value. This means that a given sum of money available now is worth more than an equivalent sum at some future data, the difference in value depending on the rate of interest earned (discount rate) and the time interval. A full description of DCF is beyond the scope of this section, but this method of accounting can make a periodic maintenance scheme more attractive than if the time value of money were not considered. The concept is illustrated in general terms by considering a sum of money P invested at an... 

Now that we have dealt with most exist factors, lets see whether the process is profitable or not. A key factor in industry is profitability regardless of technical achievement Objective procedures to aid such assessment are based on the return on investment (ROI) as the criterion. 

The development of models incorporating biomarker assays to predict the effects of chemicals upon parameters related to r has obvious attractions from a scientific point of view and is preferable, in theory, to the crude use of ecotoxicity data currently employed in procedures for environmental risk assessment. However, the development of this approach would involve considerable investment in research, and might prove too complex and costly to be widely employed in environmental risk assessment. 

At the practical level, an ideal mechanistic biomarker should be simple to use, sensitive, relatively specific, stable, and usable on material that can be obtained by nondestructive sampling (e.g., blood or skin). A tall order, no doubt, and no biomarker yet developed has all of these attributes. However, the judicious use of combinations of biomarkers can overcome the shortcomings of individual assays. The main point to emphasize is that the resources so far invested in the development of biomarker technology for environmental risk assessment has been very small (cf the investment in biomarkers for use in medicine). Knowledge of toxic mechanisms of organic pollutants is already substantial (especially of pesticides), and it grows apace. The scientific basis is already there for technological advance it all comes down to a question of investment. 

The reality of risk assessment in investment for new processes is somewhat more complex than this. The specific innovations are often not discrete and the confidence of success of each item is a probability distribution rather than a single value. Techniques to handle the mathematical aspects have been available for many years [61] and computational tools are now readily available. A detailed coverage of managing uncertainty is beyond the scope of the current text and this simplistic approach suffices to address the key question of how to effectively manage the N-and C-values. 

Kinet JP, GaUi SJ Systemic anaphylaxis in the mouse can be mediated largely through IgGl and FcyRIII. Assessment of the cardiopulmonary changes, mast cell degranulation, and death associated with active 35 or IgE- or IgGl-dependent passive anaphylaxis. J Clin Invest 1997 99 901-914. 

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