Since 1993, the Private Finance Initiative (PFI) has been the dominant form of large-scale infrastructure procurement used by National Health Service (NHS) organisations in the United Kingdom. As of April 2011, 123 PFI projects for new hospital facilities had been agreed between NHS organisations and private sector consortia, representing privately financed investment of £15.9 billion (in 2010 prices), and a projected long-term cost to the NHS of £70.5 billion. Eight additional hospital PFI schemes were being procured or prepared for tender as of April 2011, with an estimated capital investment value of £2 billion. Despite the financial significance of PFI projects to the NHS, the literature has not assessed whether, or the extent to which, the returns expected by investors are excessive. This gap in the evidence base is highly problematic. The presence of excess returns to investors will have an impact on the cost efficiency and affordability of PFI projects, and consequently the financial sustainability of the NHS organisations that pay for them. This thesis evaluates the returns that investors in NHS-commissioned PFI projects expect to earn with reference to the scale of risk being borne by these investors, and explores the sources of the identified excess via an examination of the structure and competitiveness of the PFI financing markets. The study therefore comprises two substantial empirical components. The first draws on the financial models of 11 NHS PFI projects to describe and evaluate the return to investors. Cost of capital benchmarks, constructed on the basis of the Capital Asset Pricing Model, are used as comparators to assess the Internal Rate of Return (IRR) for the 11 projects, and as discount rates to calculate Benefit-Cost Ratios. Both measures agree on the presence of significant excess returns for investors on each project – with large “spreads” between the IRRs and the corresponding cost of capital benchmarks, and high Benefit-Cost Ratio scores. The second empirical component provides an analysis of the structure and competitiveness of the market for private finance. Two indicators of this market’s structure – concentration and entry/exit rates – in addition to the dynamics of the procurement process are the focus of measurement and evaluation. It is demonstrated that: (a) the market for private finance in this sector is an oligopoly, (b) market share is highly concentrated when assessed against UK regulatory standards, and (c) churn and market penetration rates are extremely low. Constraints on the competitiveness of the market are identified as: (i) the low number of bidders; and (ii) the extensive period of non-competitive bidding in the final phase of the procurement process, in which the output specifications of projects are materially altered. The thesis concludes that recent reforms to the procurement process have been ineffective, and the problems underpinning a lack of competitive pressure in procurement may be insuperable, given the inherent complexity of this form of investment and the need to secure external financing. For the NHS, this source of cost inefficiency implies substantial opportunity costs (i.e. foregone opportunities for additional capital investment) and excess costs (i.e. a higher than necessary burden on the revenue budget). A stronger regulatory regime, incorporating regulation of the profitability of PFI projects for investors, is required to minimise the threat posed by this policy to the financial sustainability of the NHS.

Master of Agribusiness / Department of Agricultural Economics / Bryan Schurle / Frito-Lay is part of the PepsiCo Family which makes some of the best known and top selling snack foods around. Frito-Lay is the dominant player in the salty snack category in the United States, with a 65 percent share of the market. Frito-Lay brands include Lay's, Ruffles, Tostitos, Sunchips, Fritos, Cheetos, and Doritos. The objective of the thesis is to analyze a potential project: installing a raw potato sorting system on a potato chip line. Part of the analysis will be to conduct a net present value analysis of the costs and benefits associated with the project. Currently the line runs with one full time employee that inspects the raw incoming potatoes for foreign matter and color. Recently, technology options are available that the company could add to the raw potato sorting function that could potentially reduce employee labor costs. This research project provides information regarding the system’s investment cost, maintenance requirements, labor savings, and finished product quality impact. As the business environment changes businesses must keep up with rapidly changing technology to be able to compete. A company that is able to compete will be able to survive in the market and sustain profitability. Capital expenditures need to be evaluated and adopted if they keep a company competitive or make a company more cost efficient. The analysis concluded that the investment of installing a raw potato sorting system would be profitable, earning a positive NPV and internal rate of return greater than Frito-lay’s cost of capital. I would recommend that Frito-Lay move forward with this investment.

investment evaluation of solar electric power station, two main parts, first focus on evaluation before positive decision about making investment, second part reflects the present situation, use economic criterion: net present value, internal rate of return, pay-off period and additional indices

With increasing demand of electric power in the context of deregulated electricity markets, a good strategic planning for the growth of the power system is critical for our tomorrow. There is a need to build new resources in the form of generation plants and transmission lines while considering the effects of these new resources on power system operations, market economics and the long-term dynamics of the economy. In deregulation, the exercise of generation planning has undergone a paradigm shift. The first stage of generation planning is now undertaken by the individual investors. These investors see investments in generation capacity as an increasing business opportunity because of the increasing market prices. Therefore, the main objective of such a planning exercise, carried out by individual investors, is typically that of long-term profit maximization. This thesis presents some modeling frameworks for generation capacity expansion planning applicable to independent investor firms in the context of power industry deregulation. These modeling frameworks include various technical and financing issues within the process of power system planning. The proposed modeling frameworks consider the long-term decision making process of investor firms, the discrete nature of generation capacity addition and incorporates transmission network modeling. Studies have been carried out to examine the impact of the optimal investment plans on transmission network loadings in the long-run by integrating the generation capacity expansion planning framework within a modified IEEE 30-bus transmission system network. The work assesses the importance of arriving at an optimal IRR at which the firm’s profit maximization objective attains an extremum value. The mathematical model is further improved to incorporate binary variables while considering discrete unit sizes, and subsequently to include the detailed transmission network representation. The proposed models are novel in the sense that the planning horizon is split into plan sub-periods so as to minimize the overall risks associated with long-term plan models, particularly in the context of deregulation.

With increasing demand of electric power in the context of deregulated electricity markets, a good strategic planning for the growth of the power system is critical for our tomorrow. There is a need to build new resources in the form of generation plants and transmission lines while considering the effects of these new resources on power system operations, market economics and the long-term dynamics of the economy. In deregulation, the exercise of generation planning has undergone a paradigm shift. The first stage of generation planning is now undertaken by the individual investors. These investors see investments in generation capacity as an increasing business opportunity because of the increasing market prices. Therefore, the main objective of such a planning exercise, carried out by individual investors, is typically that of long-term profit maximization. This thesis presents some modeling frameworks for generation capacity expansion planning applicable to independent investor firms in the context of power industry deregulation. These modeling frameworks include various technical and financing issues within the process of power system planning. The proposed modeling frameworks consider the long-term decision making process of investor firms, the discrete nature of generation capacity addition and incorporates transmission network modeling. Studies have been carried out to examine the impact of the optimal investment plans on transmission network loadings in the long-run by integrating the generation capacity expansion planning framework within a modified IEEE 30-bus transmission system network. The work assesses the importance of arriving at an optimal IRR at which the firm’s profit maximization objective attains an extremum value. The mathematical model is further improved to incorporate binary variables while considering discrete unit sizes, and subsequently to include the detailed transmission network representation. The proposed models are novel in the sense that the planning horizon is split into plan sub-periods so as to minimize the overall risks associated with long-term plan models, particularly in the context of deregulation.

The objective of this thesis is to develop a decision support tool to assess the feasibility of a hydro electrical power plant (HEPP) investment option by estimating its profitability under various scenarios. The decision support tool may help the decision makers to understand critical parameters that affect the internal rate of return (IRR) of a HEPP investment, create realistic scenarios by assigning different values to these parameters and monitor profitability under various scenarios. The information and the assumptions to construct the proposed decision support tool have been collected by conducting interviews with experts and its reliability has been tested by a real case study.

This study was done against the backdrop that executives should carefully consider all the options to manage difficult periods before letting employees go, especially if they are going to rehire employees shortly after the economic recovery. Therefore, the study investigated whether investing in operational development of a plant can be used to increase feasibility, rather than to make across–the–board labour cuts. Two South African mining companies were chosen for this study. They are two investment centres at AngloGold Ashanti, Mine X Ltd. and Mine Z Ltd. The investigating project was done at Mine X to extract gold from the neighbouring Mine Z. Mine X will have access to the minerals 40 years in advance of Mine Z due to insufficient essential infrastructure at Mine Z. The life–time of the project is 18 years (estimated). The main objective of this study is to investigate the feasibility, from Mine X’s point of view, with a deepening project including Mine Z. The most significant aspect will be to determine which investment timeframe decision will gain Mine X a feasible position in terms of economic growth. This will be achieved by the following secondary objectives in making a capital investment decision: 1. To describe the nature and significance of investment decision making. 2. To recognise appropriate capital investment evaluation techniques in conjunction with sensitivity analysis. 3. To apply the techniques and sensitivity analysis in order to make a decision of a possible, feasible investment opportunity at Mine X. 4. To develop a framework to identify the project’s components and associate and access difficulties for Mine X‘s project lifecycle. The feasibility study undertakes multiple scenarios and provides recommendations and a final report, based on the scenario that is the most viable. The following techniques which were identified were used to analyse the feasibility of the project: Net present value, internal rate of return and payback period. All these above techniques will be analysed in three different scenarios, namely: 1. Mine X will stay with its current operations without any new projects. 2. The development project will begin immediately. 3. A six–month delay in development of the project. The study found that the net present value was positive, the internal rate of return was more than the discount rate and the payback period was shorter than the project’s life–time regarding to all three above–mentioned scenarios. The highest net present value is calculated in case the project starts immediately. Both the internal rate of return and the payback period indicated that a six month delay in the project is the most viable. After considering all the facts, the study concluded due to the highest net present value the best feasible recommendation would be to start the project immediately. The value of this study is that it is the first study to investigate the relationship between the viability to delay or to start the investment project immediately in the South African mining industry. This study is also unique, since it takes into account how mining industries world–wide can achieve long–term success through development projects without losing key players, due to impulsive short–term downsizing decisions. / Thesis (M.Com. (Management Accountancy))--North-West University, Potchefstroom Campus, 2012.

This study was done against the backdrop that executives should carefully consider all the options to manage difficult periods before letting employees go, especially if they are going to rehire employees shortly after the economic recovery. Therefore, the study investigated whether investing in operational development of a plant can be used to increase feasibility, rather than to make across–the–board labour cuts. Two South African mining companies were chosen for this study. They are two investment centres at AngloGold Ashanti, Mine X Ltd. and Mine Z Ltd. The investigating project was done at Mine X to extract gold from the neighbouring Mine Z. Mine X will have access to the minerals 40 years in advance of Mine Z due to insufficient essential infrastructure at Mine Z. The life–time of the project is 18 years (estimated). The main objective of this study is to investigate the feasibility, from Mine X’s point of view, with a deepening project including Mine Z. The most significant aspect will be to determine which investment timeframe decision will gain Mine X a feasible position in terms of economic growth. This will be achieved by the following secondary objectives in making a capital investment decision: 1. To describe the nature and significance of investment decision making. 2. To recognise appropriate capital investment evaluation techniques in conjunction with sensitivity analysis. 3. To apply the techniques and sensitivity analysis in order to make a decision of a possible, feasible investment opportunity at Mine X. 4. To develop a framework to identify the project’s components and associate and access difficulties for Mine X‘s project lifecycle. The feasibility study undertakes multiple scenarios and provides recommendations and a final report, based on the scenario that is the most viable. The following techniques which were identified were used to analyse the feasibility of the project: Net present value, internal rate of return and payback period. All these above techniques will be analysed in three different scenarios, namely: 1. Mine X will stay with its current operations without any new projects. 2. The development project will begin immediately. 3. A six–month delay in development of the project. The study found that the net present value was positive, the internal rate of return was more than the discount rate and the payback period was shorter than the project’s life–time regarding to all three above–mentioned scenarios. The highest net present value is calculated in case the project starts immediately. Both the internal rate of return and the payback period indicated that a six month delay in the project is the most viable. After considering all the facts, the study concluded due to the highest net present value the best feasible recommendation would be to start the project immediately. The value of this study is that it is the first study to investigate the relationship between the viability to delay or to start the investment project immediately in the South African mining industry. This study is also unique, since it takes into account how mining industries world–wide can achieve long–term success through development projects without losing key players, due to impulsive short–term downsizing decisions. / Thesis (M.Com. (Management Accountancy))--North-West University, Potchefstroom Campus, 2012.

The master thesis focuses on investments in office buildings. The aim of the thesis is to make an evaluation analysis of investment decision with focus on its informational support and criteria applied in making investment decisions on office buildings market. The thesis is divided into four parts. The first part discusses current development on the commercial property market in the Czech Republic and analyzes in detail the development of the Prague office buildings market. The second part is about main factors that affect value of these properties. The third part describes investors operating on the market and the last part analyzes the economic efficiency of two selected investments. This master thesis is a pilot project generalizing criteria that affect investing in office buildings, and which can be further expanded.

Diplomová práce se zabývá vytvořením softwarové aplikace IRR tool, pro společnost ABC s.r.o. IRR tool je nástroj sloužící k monitoringu vnitřního výnosového procenta investic, které jsou nabízeny v produktech společnosti. Cílem práce je s využitím Visual Studia rozšířit prostředí sloužící zaměstnancům společnosti o tento nástroj a nabídnout jim možnost nahlédnutí k výpočtu tohoto ukazatele. Nástroj poslouží k upřesnění informací pro zaměstnance, podpoří jejich analytické možnosti a povede k vyšší spokojenosti zákazníků.