The limitation of public funds available for infrastructure projects has induced governments to attract private entities to participate in long-term contracts for financing, constructing, and operating huge infrastructure projects through Public Private Partnerships (PPPs) to reduce debt, constrain taxation, and share financial risks and rewards between the public and private sectors. Because these projects have such complicated risk evolutions, diverse contractual forms for project members to hedge their risks are necessary. Hence, the Build-Operate-Transfer (BOT) model has been considered as a very popular type to accomplish PPPs with the characteristic of a shared-ownership. For the government to attract private sector?s participation, they have used incentive systems such as debt payment guarantee, Minimum Revenue Guarantee (MRG), or direct cash support. These incentive systems have been important critical success factors in BOT projects yet they have remained unfavorable in bidding process by failure of the traditional capital budgeting theory, Net Present Value (NPV) analysis, in evaluating the guarantee values. This is because NPV analysis can not reflect the guarantee agreements? contingent characteristic. For this reason, ?Real Option Concept? imported from ?Option Pricing Theory? in finance has been used as an effective way in estimating the guarantee value during the construction and operation of the project. However, there are still open issues in identifying, formulating, and calculating the guarantee agreements? contingency due to the complexity of option pricing theory and in considering the uncertainty of the underlying asset. Furthermore, in recent real option-related research that evaluate BOT investment projects, the volatility of rate of return in underlying asset (project value) is assumed to be just given or too simplified in its calculating process despite its significant impact on the guarantee value. The purpose of this research is to develop the binomial real option model to better evaluate the MRG value by complementing existing real option models without violating the option pricing theory. To do so, the developed model in this research is to formulate the MRG agreement as a put option, consider the uncertainty of the underlying asset, and use the more detailed level of volatility with a Monte Carlo simulation approach. To verify the applicability of the developed model, the model is applied to three different BOT project case studies, then, the results are compared with those by NPV analysis, Cheah and Liu (2006)?s real option model, and option pricing theory derived from Black-Scholes model. Finally, based upon the results and analyses, the developed real option model appears to provide a practical and theoretical framework to quantitatively evaluate the MRG agreement under the BOT scheme and help the government establish better BOT policies and help the developer make appropriate bidding strategies in its investment.

The aim of this study is to examine factoring as an option of finance for small businesses to make capital available to the cash account. Small businesses constitutes 99.4 percent of all enterprises in Sweden, and are thereby important actors of the community. Liquidity is the viability of a company; cash flow problems limits growth and is a common reason for bankruptcy. Factoring is a finance option which make capital locked in account receivables available. Through a qualitative study using interviews, the use of factoring has been examined amongst five small businesses in the construction industry. The results showed that factoring is a suitable option of finance for small businesses to attain greater value since it creates the right prerequisites. Companies use factoring when they have liquidity problems and an imbalance in cash flows. Positive aspects of factoring is especially its ability to quickly improve the cash flow. The negative highlighted is the cost, but they are considered reasonable. / Syftet med forskningen är att undersöka factoring som finansieringsalternativ för småföretag för att frigöra kapital till kassan. Småföretag utgör 99,4 procent av allt företagande i Sverige och är därmed viktiga aktörer för samhället. Likviditet är företags livskraft, problem med kassaflödet begränsar tillväxt och är en vanlig anledning till att företag går i konkurs. Factoring är ett finansieringsalternativ som frigör kapital som är låst i kundfordringar. Genom en kvalitativ studie, med hjälp av intervjuer, har nyttjandet av factoring undersökts bland fem stycken småföretag i byggbranschen. Resultatet av studien visade att factoring är ett lämpligt finansieringsalternativ för småföretag att uppnå ett högre värde eftersom det skapar rätt förutsättningar. Företag använder factoring vid likviditetsproblem och obalans i kassan. Det positiva med factoring är framförallt dess förmåga att snabbt förbättra kassaflödet. Nackdelarna som lyfts fram är kostnaderna, men dessa anses rimliga.