The study was conducted to establish what effect life cycle cost forecasting accuracy has on project valuations with special reference to a global mining organisation’s coal business unit in South Africa. The research stemmed from the fact that the organisation identified through its own research in 2009 that its capital projects rarely met the originally budgeted life cycle cost forecasts estimated during the project development stages. These forecasts were generally found to be underestimated. Overrunning of cost budgets in project management terms results in project failure. The study employed two main empirical research sections. The first section took a case study approach where past implemented project results were collated and analysed. The main aim was to determine how close to reality the original life cycle cost estimates were, and secondly how any variances to the originally budgeted costs impacted on the anticipated project value post implementation. Secondly, the study employed in-depth interviews with seven project specialists within the organisation that were also involved in the development stages of the investigated projects. The study concluded that life cycle cost forecasts are very important project business case inputs and that the necessary time and effort should go into developing them so as to ensure that they are as comprehensive and accurate as possible. The sensitivity analysis that was conducted revealed that a coal mining project business case is the second most sensitive to variations in life cycle costs after variations in commodity price. The results indicated that a 20% increase in life cycle costs can destroy an equivalent project value of up to 100%. Accurate life cycle cost forecasting is therefore essential in order to estimate to a certain degree of accuracy the value of a project which in turn will be used to inform capital investment decision making. / MBA, North-West University, Potchefstroom Campus, 2014

The study was conducted to establish what effect life cycle cost forecasting accuracy has on project valuations with special reference to a global mining organisation’s coal business unit in South Africa. The research stemmed from the fact that the organisation identified through its own research in 2009 that its capital projects rarely met the originally budgeted life cycle cost forecasts estimated during the project development stages. These forecasts were generally found to be underestimated. Overrunning of cost budgets in project management terms results in project failure. The study employed two main empirical research sections. The first section took a case study approach where past implemented project results were collated and analysed. The main aim was to determine how close to reality the original life cycle cost estimates were, and secondly how any variances to the originally budgeted costs impacted on the anticipated project value post implementation. Secondly, the study employed in-depth interviews with seven project specialists within the organisation that were also involved in the development stages of the investigated projects. The study concluded that life cycle cost forecasts are very important project business case inputs and that the necessary time and effort should go into developing them so as to ensure that they are as comprehensive and accurate as possible. The sensitivity analysis that was conducted revealed that a coal mining project business case is the second most sensitive to variations in life cycle costs after variations in commodity price. The results indicated that a 20% increase in life cycle costs can destroy an equivalent project value of up to 100%. Accurate life cycle cost forecasting is therefore essential in order to estimate to a certain degree of accuracy the value of a project which in turn will be used to inform capital investment decision making. / MBA, North-West University, Potchefstroom Campus, 2014

Neste trabalho é apresentado o suporte teórico necessário para a aplicação do apreçamento de opções reais com incertezas exógenas, inclusive com incertezas nãocomercializadas ou em mercados incompletos. Em seguida, o processo de modelagem de opções reais é analisado, sugere-se uma estrutura de modelagem de projetos com flexibilidade a partir de suas incertezas básicas, e comparam-se as duas principais abordagens atuais de modelagem de opções reais. / In this work is presented the theoretical support needed for the application of real options pricing with exogenous uncertainties, include non-traded uncertainties and incomplete market uncertainties. It is also analyzed the process of real options modeling, suggesting a framework of project modeling with flexibility from its basic uncertainties, and it is compared the two main approaches for valuing real options.

Abstract This research is based on the WeMET Wireless Broadband Corp., the greatest wireless broadband provider in Kaohusiung. We integrate business resource of WeMET, industrial background in Kaohsiung, channel advantage about ISP, and dynamic feature from IP, then creating new ads media with digital narrowcasting media service by using wireless broadband network. Depending on the business plan with highly narrowcasting ads service, we can establish the market segment against the tradition ads channel, and go deep into the economical recovering market in Kaohsiung. This research gathers many references about broadband network, ISP, outdoor and narrowcasting media, as well as economical development in Kaohsiung. The research also investigates and interviews ads provider, store keeper and customer. By using such data, we can create the business plan due to this research, and analyze the advantage and development strategy depending on the ads service. In order to prove the availability of this plan, we evaluate the financial performance and make the sensitivity analysis in conclusion. Based on the empirical result, comparing to traditional outdoor ads, the advantage of this business plan is , and reduce the channel cost about setting up ads equipment. Besides, not only the characteristic of narrowcasting media can save media resource, but also increase the matching efficiency, and create the long tail effect, which reduce ads quantity and raise ads quality.

The public sector often invests in large projects in different sectors, such as education, health care and infrastructure. It can be argued that investment appraisal process in these projects should differ from conventional approaches due to the complex interests the public sector holds, which often implies that several aspects need to be considered. Conventional techniques may not suffice and therefore this thesis aims to investigate the applicability of real options analysis and multi-criteria analysis in a combined approach. The study is conducted in the form of a case study at publicly owned Sundsvalls Logistikpark, where options in the form of the utilization of development areas and the non-monetary aspect reduction of carbon dioxide are included in the appraisal. The model developed compares two alternative strategies where one is based upon conventional usage of the area and the other represents the environmentally friendly alternative. The results show that including the value of flexibility in the appraisal significantly raises the initial valuation, whereas the comparison of the strategies show that the results either details which strategy is preferred, if input to both strategies are available, or where the threshold for indifference lies. It is concluded that this model is applicable in terms of its ability to capture the value of flexibility and inclusion of several aspects of the decision problem. However, it is also concluded that the numerous simplifications made may lead to unreliability in the results, and the process of obtaining accurate input may time-consuming, depending on the case. The usability of the model is high in terms of its potential, but lower in terms of the knowledge-based threshold required of the user.

Real options analysis has been recommended to identify and quantify opportunities where managerial flexibility can influence worth. However, real options models in the literature have become increasingly sophisticated, and managers have cited their reluctance to use such models due to their level of complexity and lack of transparency. Presented in this thesis is a real options model that can be easily incorporated into the current project selection methodology of a firm; the model uses managerial cash flow estimates to price real options on tangible investment opportunities in a financially consistent manner. Next, to demonstrate the application of real options analysis in practice, five real options models, including the proposed model, are applied to value a medical device project. The models all price the real option differently, due to the differences in their underlying assumptions, but they all yield the same investment conclusion: the medical device project has value.

Real options analysis has been recommended to identify and quantify opportunities where managerial flexibility can influence worth. However, real options models in the literature have become increasingly sophisticated, and managers have cited their reluctance to use such models due to their level of complexity and lack of transparency. Presented in this thesis is a real options model that can be easily incorporated into the current project selection methodology of a firm; the model uses managerial cash flow estimates to price real options on tangible investment opportunities in a financially consistent manner. Next, to demonstrate the application of real options analysis in practice, five real options models, including the proposed model, are applied to value a medical device project. The models all price the real option differently, due to the differences in their underlying assumptions, but they all yield the same investment conclusion: the medical device project has value.

Neste trabalho é apresentado o suporte teórico necessário para a aplicação do apreçamento de opções reais com incertezas exógenas, inclusive com incertezas nãocomercializadas ou em mercados incompletos. Em seguida, o processo de modelagem de opções reais é analisado, sugere-se uma estrutura de modelagem de projetos com flexibilidade a partir de suas incertezas básicas, e comparam-se as duas principais abordagens atuais de modelagem de opções reais. / In this work is presented the theoretical support needed for the application of real options pricing with exogenous uncertainties, include non-traded uncertainties and incomplete market uncertainties. It is also analyzed the process of real options modeling, suggesting a framework of project modeling with flexibility from its basic uncertainties, and it is compared the two main approaches for valuing real options.

The goal of the disertation is valuation of economic effectiveness of the project of building and operation of data centre (telehouse centre). The theoretical part contains basic principles and methods of risk analysis of investment project (break event point, sensitivity analysis), the description of preparation and realisation of investment project, planning of cash flow, determination of discount rate, the possible ways of finance of investment project, the methods of valuation of effectiveness investments. The practical part contains the analysis of telecommunication market, Porters model of competitive powers in the sphere of telecommunication firm, specification of the costs of the project, price statement of Serverhousing, the plan of costs, plan of profit and lost statement, the determination of net present value.

The Co-Alignment Principle is a strategic management framework that guides value-added management. The model suggests that firms will perform successfully if they scan the environment for forces driving change and allocate their resources to industry-leading competitive methods that address environmental trends. When financing and managing a capital project, a firm's managers must think strategically and consider the "four pillars" of project valuation and management: (1) estimating future cash flows over the project's life cycle, (2) determining an appropriate cost of capital/rate of return, (3) assessing and managing operational and financial risk, and (4) investing in the appropriate materials and resources. The four pillars of project valuation and management act as a framework to guide this investigation on university conference center financing. The overall research question of this study asks how university officials make conference center investment decisions based on the four pillars of project valuation and management. To answer the research questions posed by this investigation, this study adopted a multiple case study approach, in which officials at five universities were interviewed about their universities' conference center projects. Interviews with two executive-level personnel at each university along with multiple sources of written documentation provided the basis for conclusions. Evidence from the data collection phase of this project indicates that universities follow similar procedures for financing their conference centers. For instance, they take advantage of low-cost, tax-exempt debt and private contributions to fund these capital projects. In addition, they place little emphasis on sensitivity analyses for cash flow projections and ignore the opportunity costs of capital. University conference center financing practices with respect to the four pillars of project valuation and management are not consistent with the recommendations set forth by traditional financial principles. This study concludes that universities should improve their strategic thinking and pay more attention to the four pillars in order to increase the viability of their conference center businesses. / Master of Science