Briefly describes the nature and importance of capital investments and why managers of all functional areas should understand the basics of analysis. Reviews conceptual…
Briefly describes the nature and importance of capital investments and why managers of all functional areas should understand the basics of analysis. Reviews conceptual issues. Develops important perspectives for corporate leaders, managers and analysts. Provides practical guidelines for analysis. Furnishes a useful format for analysis easily adaptable to spreadsheet analysis. Illustrates techniques of analysis using a sample capital project. Interprets the results in a common‐sense manner and in terms of the contribution of the project to shareholder value. Addresses issues at a level appropriate for each professional manager regardless of their area of expertise and functional assignment.
Various factors may influence project finance when a multi-sourced debt financing strategy is used for financing capital investments, in general, and public infrastructure…
Various factors may influence project finance when a multi-sourced debt financing strategy is used for financing capital investments, in general, and public infrastructure investments, in particular. Traditional indicators lack comprehensive consideration of the influences of many internal and external factors, such as investment structure, financing mode and credit guarantee structure, which exist in the financing decision making of BOT projects. An effective approach is, thus, desired. The paper aims to discuss these issues.
This paper develops a financial model that uses an interval number to represent the uncertain factors and, subsequently, conducts a standardization of the interval number. Decision makers determine the weight of each objective through the analytic hierarchy process. Through the optimization procedure, project investors and sponsors are provided with a strategy regarding the optimal amount of debt to be raised and the insight on the risk level based on the net present value, as well as the probability of bankruptcy for each different period of debt service.
By using an example infrastructure project in China and based on the comprehensive evaluation, comparison and ranking of the capital structures of urban public infrastructure projects using the interval number method, the final ranking can help investors to choose the optimal capital structure for investment. The calculation using the interval number method shows that X2 is the optimal capital structure plan for the BOT project of the first stage of Tianjin Binhai Rail Transit Z4 line. Therefore, investors should give priority to selecting a capital contribution ratio of 45 per cent for this investment.
In this paper, some parameters, such as depreciation life, construction period and concession period, are assumed to be deterministic parameters, although the interval number model has been introduced to analyze the uncertainty indicators, such as total investment and passenger flow, of BOT rail transport projects. Therefore, more of the above deterministic parameters can be taken as uncertainty parameters in future research so that calculation results fit actual projects more closely.
This model can be used to make the optimal investment decision for a project by determining the impact of uncertainty factors on the profitability of the project in its lifecycle during the project financial feasibility analysis. Project sponsors can determine the optimal capital structure of a project through an analysis of the irregular fluctuation of the unpredictable factors in project construction such as construction investment, operating cost and passenger flow. The model can also be used to examine the effects of different capital investment ratios on indicators so that appropriate measures can be taken to reduce risks and maximize profit.
I examine three recent cases where local governments changed their processes for selecting capital projects. The central question is whether these changes…
I examine three recent cases where local governments changed their processes for selecting capital projects. The central question is whether these changes institutionalized a more “strategic” outlook in capital improvement planning and budgeting for these jurisdictions? The findings suggest that local governments can set capital priorities strategically, but that the process of implementing those reforms must be adaptable to changing political circumstances. These findings add to the limited literature on the political, administrative, and other challenges that local governments must confront when reforming their capital improvement planning and budgeting processes.
Capital budgeting plays an essential role in a firm's long‐term viability and survival. The capital budgeting process includes: identification of potential projects, prediction of possible outcomes, project selection, financing and implementation of the chosen project, and monitoring project performance (Mukherjee and Henderson, 1987). Although economic considerations should govern the capital budgeting decision, individual opinions and preferences often become primary factors affecting project selection.
The purpose of this paper is to set out to identify key team factors associated with the fast implementation of capital projects. Although scholars theorise that project…
The purpose of this paper is to set out to identify key team factors associated with the fast implementation of capital projects. Although scholars theorise that project success depends as much on the effective management of project personnel as on technical management, the project literature is virtually silent on which team practices are pivotal.
Using a model‐based quantitative research design, the impact of team management variables on the speed of two different phases of capital project implementation were examined: project execution and project construction. Multi‐method data collection included 252 individual surveys, archival documents, and whole team interviews conducted at the closeout of 56 capital projects implemented in four continents by 15 Fortune 500 companies in the process industries.
Empirical analysis revealed that only some of the variables predicted from other literatures (project manager – PM continuity, cross‐functional team integration, and PM incentives) were significantly linked to fast schedule outcomes. Some key drivers differed according to temporal phase.
Limitations of this study included its cross‐sectional design, modest sample size and sampling frame, but the findings clearly demonstrate the value of further research into key team factors for project success.
The results suggest that strategic management of project personnel can drive project speed. Phase‐linked key team practices are identified for improving time performance in capital projects.
This study breaks new ground by exploring whether key team practices are generic and phase‐specific, and by identifying specific team drivers of speed for two capital project phases using objective outcome measures.
Effective use of capital is an important strategic tool for any manufacturing company operating in today’s high technology and capital intensive environment. This purpose…
Effective use of capital is an important strategic tool for any manufacturing company operating in today’s high technology and capital intensive environment. This purpose of this paper is to carry out an investigative study into strategic business processes for capital effectiveness practices (CEP) in industry, by means of a literature review, a survey of a sample of UK and US companies and a case study of the Chemco Corporation.
Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.