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Ethanol Plant Investment using Net Present Value and Real Options Analyses

Schmit, Todd M.; Luo, Jianchuan; Tauer, Loren W. - Charles H. Dyson School of Applied Economics and … - 2008

A real option analysis of dry-grind corn ethanol plants compared to a standard net present value analysis (NPV) shows … large plant, the gross margin of ethanol price over the corn price for a gallon of ethanol using NPV shows that entry will … reactivate if margins rebounded to $0.66. Growth in the variability of ethanol margins will delay new plant investments, as well …

Persistent link: https://www.econbiz.de/10004979510

The Economic Feasibility of Energy Sugar Beet Biofuel Production in Central North Dakota

Maung, Thein A.; Gustafson, Cole R. - Agricultural and Applied Economics Association - AAEA - 2010

This study examines the financial feasibility of producing ethanol biofuel from sugar beets in central North Dakota … risks of production for a 10MGY (million gallon per year) and 20MGY ethanol plant. Study results indicate that feedstock … breakeven ethanol price for the 20MGY plant is $1.52 per gallon and $1.71 per gallon for the 10MGY plant. Breakeven prices for …

Persistent link: https://www.econbiz.de/10009020535

A MODEL OF ENTRY-EXIT DECISIONS AND CAPACITY CHOICE UNDER DEMAND UNCERTAINTY

Isik, Murat; Coble, Keith H.; Hudson, Darren; House, Lisa - Agricultural and Applied Economics Association - AAEA - 2002

Many investment decisions of agribusiness firms such as when to invest in an emerging market or whether to expand the capacity of the firm involve irreversible investment and uncertainty about demand, cost or competition. This paper uses an option-value model to examine the factors affecting an...

Persistent link: https://www.econbiz.de/10005460272

The timing of innovation: an interpretation based on real options and game theory

Ndiaye, Babacar - In: Journal of Innovation Economics n°10 (2012) 2, pp. 219-231

Persistent link: https://www.econbiz.de/10011187464

Opciones reales

Velez-Pareja, Ignacio - MASTER CONSULTORES - 2009

Este es material de curso del libro Decisiones Empresariales bajo Riesgo e Incertidumbre. El nivel del libro es basico. Se usan muy pocas matematicas y puede ser usado por gerentes. En este decimo y ultimo capitulo se presenta una breve y sencilla introduccion a las opciones financieras y al...

Persistent link: https://www.econbiz.de/10010762955

Using Real Options Theory to Irrigation Dam Investment Analysis: An Application of Binomial Option Pricing Model

Michailidis, Anastasios; Mattas, Konstadinos - In: Water Resources Management 21 (2007) 10, pp. 1717-1733

This paper demonstrates the utility of the real options approach to irrigation dam investment analysis. The main objective is to show how to calculate the option values of selected options that may be available to managers of irrigation dam investments. The paper provides an empirical...

Persistent link: https://www.econbiz.de/10010794111

A Socioeconomic Valuation of an Irrigation System Project Based on Real Option Analysis Approach

Michailidis, Anastasios; Mattas, Konstadinos; … - In: Water Resources Management 23 (2009) 10, pp. 1989-2001

Traditional net present value methods used to evaluate potential projects make no allowance for flexibility and assume a static environment. The concept of real options has extended into irrigation systems to model design flexibility in the realistically uncertain environment. In particular,...

Persistent link: https://www.econbiz.de/10010794304

A foreign investment project of an autoparts firm: Real options versus financial valuation

García, María Luisa Saavedra; García, Máximo Jorge … - In: Economía 38 (2013) 35, pp. 127-156

This study examines the importance of using real options model in the auto industry by means of its application to the case of a direct investment abroad, specifically in Brazil. We use the Black and Scholes and Binomial models. Empirical results show that this is the kind of project that,...

Persistent link: https://www.econbiz.de/10010962214

Valuation: From The Discounted Cash Flows (DCF) Approach To The Real Options Approach (ROA)

Ochoa, Cecilia Maya - UNIVERSIDAD EAFIT - 2007

There exists an abysm between market prices and traditional valuation approaches such as Discounted Cash Flows (DCF), a fact that neither academics nor practitioners could continue ignoring. Recently, a complementary approach has taken a foothold into the valuation world.Building on the DCF...

Persistent link: https://www.econbiz.de/10011171468

The Smith Company: a case on capital budgeting and real options

Shastri, Karen A.; Shastri, Kuldeep; Stout, David E. - In: Managerial Finance 37 (2011) July, pp. 647-657

Purpose – This paper aims to provide upper-level accounting and/or finance students with a review of the intricacies of option pricing, discounted cash flow (DCF) capital budgeting decision models, various types of real options, how risk analysis of long-term capital investments can be...

Persistent link: https://www.econbiz.de/10009275391