Profit venture

Fig. 5. Effect of lifetime on profitability. Venture F has a shorter operating lifetime than Venture A, but the same investment and IRR (see Table 4) the NPV is the same at the 10% discount rate. The diagram indicates that the profitabiUty of Venture F is higher than that of Venture A at all discount rates the shorter lifetime leads to a higher annual net return rate (NRR). The IRR rate does not indicate this difference in profitabiUty.

Finally, optimizing these processing steps is essential to a successful and profitable venture. 

If the detailed design indicates a profitable venture that meets the return criteria set forth by company managers, a recommendation will be made to go ahead with the construction if funds are available. 

Monazite is usually a minor constituent of deposits of other minerals, all of which must be separated and processed for a profitable venture. As an example, the mineral constituents of beach sands in Travancore, India, which are dredged for their zirconium, titanium, thorium, and rare-earth content, are as follows ... 

The EEIS will be a non-profit venture, but will operate on a fee-paying basis. At the same time, the System is conceived to complement, and not to compete with, existing national and international initiatives. 

In this example, values of both ROI and PBP are sufficient to merit some interest in the project, but they are not sufficient to attract a high degree of interest unless the process is of very low risk and only less-profitable ventures are under consideration. ... 

While we do not know exactly how much we need to invest into the vinyl acetate process (this is one of the questions we have for you), we crudely estimate it to be less than 50-60 MM onsite. Since the cost of capital is 12%, we therefore expect this to be a profitable venture. 

In 1927 the DuPont Company reached a decision to begin a program of fundamental research, "without any regaiii or reference to commercial objectives". This was a rascal departure fi om the common practice of the chemical industry then which supported potentially profitable ventures, leaving the "ivy covered" hall of academia to provide the necessary fundamental research. 

The objective of any exploration venture is to find new volumes of hydrocarbons at a low cost and in a short period of time. Exploration budgets are in direct competition with acquisition opportunities. If a company spends more money finding oil than it would have had to spend buying the equivalent amount in the market place there is little Incentive to continue exploration. Conversely, a company which manages to find new reserves at low cost has a significant competitive edge since it can afford more exploration, find and develop reservoirs more profitably, and can target and develop smaller prospects. 

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 acquisition of the rights to the viscose process became one of the most profitable investments of aU time. Interest in the new fiber was intense, and growth of production capacity was exponential. By 1907, the Courtauld company was selling aU the artificial sHk it could produce and proceeded to expand into the U.S. market. In 1910 they formed the American Viscose Co. and in 1911 started the first U.S. viscose factory at Marcus Hook. By 1939, Courtaulds had six factories in the United States, seven in the United Kingdom, one in Erance, one in Canada, and joint ventures in Germany and Italy. 

Any positive value of the NRR represents a profitable situation. NRR values for different venture choices can be compared directly. As an alternative, a NRR cutoff level could be selected as the minimum level for acceptabiUty of any venture. 

Profitability Diag rams. Profitabihty diagrams of the type shown in Figure 3a for Venture A provide insight into venture profitabihty. Total return rate is defined as the sum of the discount rate and the net return rate (NRR). The discount rate, net return rate, and total return rate are all shown on the diagram as functions of the discount rate. Because the NPV is a nonlinear function of the discount rate, the NRR and total return rate are also nonlinear. The NRR, as a measure of the profitabihty, correctly decreases as the discount rate increases. 

Profitability Diagram. The sensitivity of profitabiUty criteria to parameter changes or other effects can also be represented on a profitabiUty diagram. For example, plus 10% change in fixed capital investment for Venture A gives the results shown in Figure 7b. If several other investment levels were plotted, then interpolation would be a simple task and the sensitivity to investment level could be visualized readily. 

The net profit is the total income minus operating costs minus depreciation minus tax. The ROI is often calculated for the anticipated best year of the project the year in which the profit is greatest. This criterion is also used for small investments. In general, acceptable ROT are about 20 %, but typical values are difficult to give. Both POT and ROI provide a one-moment-in-time view and do not take into account future cash flows, which may not be constant in the lifetime of the venture. 

A company wants to make the largest profit it can from the money it invests. It wants to be able to compare the prospective earnings it may get from different ventures. Two of the simplest measures are the return on investment and the payout time. 

Multivariate curve resolution, 6 54—56 Multivariate linear regression, 6 32—35 Multivariate optical elements (MOE), 6 68 Multiwalled carbon nanotubes (MWCNTs), 77 48, 49 22 720 26 737. See also Carbon nanotubes (CNTs) Multiwall nanotubes (MWNTs) synthesis of, 26 806 Multiwall fullerenes, 12 231 Multiwall nanotubes (MWNTs), 12 232 Multiwall paper bags, 78 11 Multiway analysis, 6 57-63 Multiyear profitability analysis, 9 535-537 Multiyear venture analysis, 0 537-544 sample, 9 542-S44 Mummification, 5 749 Mumps vaccine, 25 490 491 Mumps virus, 3 137 Municipal biosolids, as biomass, 3 684 Municipal distribution, potential for saline water use in, 26 55-56 Municipal effluents, disposal of, 26 54 Municipal landfill leachate, chemicals found in, 25 876t... 

The cost of developing a new chemical will not be spread over the manufacturer s product line. As a general rule, no company will intentionally begin a venture unless it believes that the venture will recover its investment and make a profit. If a manufacturer does not believe that the product will generate an acceptable return on investment, the company will invest its funds elsewhere. Any other approach would be uneconomic and would eventually harm the company. 

In business, money is either borrowed or loaned. If money is loaned, there is the risk that it may not be repaid. From the lender s standpoint, the funds could have been invested somewhere else and made a profit therefore, the interest charged for the loan is compensation for the forgone profit. The borrower may look upon this interest as the cost of renting money. The amount of interest charged depends on the scarcity of money, the size of the loan, the length of the loan period, the risk that the lender feels that the loan may not be repaid, and the prevailing economic conditions. Engineers involved in the presentation and/or the evaluation of an investment of funds in a venture, therefore, need to understand the time value of money and how it is applied in the evaluation of projects. 

To determine the worthiness of a venture, quantitative and qualitative measures of profitability are considered. 

When a company invests in a venture, the investment must earn more than the cost of capital for it to be worthwhile. A profitability estimate is an attempt to quantify the desirability of taking a risk in a venture. 

Profitability A term generally apphed in a broad sense to the economic feasibility of a proposed venture or an ongoing operation. It is generally considered to be related to return on investment. 

The three main factors to be considered are the costs involved the probability of technical and coimnercial success and the likely profitability of the venture. Formal assessment is not of course a completely exact exercise and should be used judiciously to support the technical and business judgement and intuition of experienced staff. Obviously, the higher the cost of the project, and especially the greater the technical and... 

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