Plug-in hybrid electric vehicles (PHEVs) enable their drivers to choose whether to use electricity or gasoline, but this fuel flexibility benefit requires the purchase of additional battery capacity relative to most other vehicles. We value the fuel flexibility of PHEVs by representing the purchase of the battery as the purchase of a strip of call options on the price of transportation. We use ...

The main objective of this paper is to develop a two-warehouse inventory model with partial backordering and Weibull distribution deterioration. We consider inflation and apply the discounted cash flow in problem analysis. The discounted cash flow DCF and optimization framework are presented to derive the optimal replenishment policy that minimizes the total present value cost per unit time. Wh...

Current theories of the discount rate have a theoretical basis focused on risk; risk-free and risk premium. The basic component rate, as purely empirical has natural infirmity which consequently weakens final theory. Similarly, premium category is not theoretically perfect. fundamental shortcoming that theory does relate to knowledge capital its potential growth. Therefore, purpose discussion j...

This study compares profitability and risk of conventional cage-free egg production in the United States. Evaluating is particularly relevant given ongoing consumer driven changes new legislation. Results show that while Modified Internal Rate Return (MIRR) for above an estimated industry opportunity cost capital, production’s MIRR does not fully satisfy investors’ expectations. The investment,...

Discounted cash flow (DCF) is the most accepted approach for company valuation. It is well grounded in theory and practice. However, the DCF approach, which is commonly used for traditional companies valuation, presents a number of serious weaknesses within the Internet companies’ context. One of these weaknesses is tackling the uncertainty that characterize future cash flows of these companies...

The purpose of this paper is to study a Monte Carlo simulation of the discounted payback, and its application to investment appraisal. The underlying project in the case study has a useful life of 10 years with an initial outlay of $2,000, and with stochastic, independent, and normally distributed cash inflows. These cash inflows are simulated from the same normal frequency distribution, i.e. f...