• Journal of the Korea Academia-Industrial cooperation Society
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• v.11 no.4
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• pp.1442-1448
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• 2010

The evaluation of the financial viability of a privatized infrastructure project is complex because of the uncertainties involved due to the project's scale, long concession period and complexity. Use the BOT option valuation(BOT-OV) model, for evaluating the financial analysis of a privatized infrastructure project. This sophisticated for financial evaluation compared with a traditional NPV analysis.

• Journal of Korea Technology Innovation Society
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• v.9 no.1
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• pp.84-102
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• 2006

This paper compares four models to value a biotechnology R&D project; option tree model, dynamic discounted cash flow(DCF) model, and option thinking DCF model with general DCF model. Real Options, especially 6-folded option tree model yields boner estimate of value than values using other methods. According to sensitivity analysis, sales of final products, number of investigational new drug developments(INDs) and success rates of each stage are key factors for the value of biotechnology R&D investment.

• Proceedings of the Technology Innovation Conference
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• 2001.06a
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• pp.117-130
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• 2001

R&D is the core competence of an enterprise. Furthermore, R&D requires huge capital investment and has very risky characteristics. Therefore, to be successful in R&D process, several approaches of engineering economics are used prior to decision-making. Until now, typical approaches of engineering economics such as NPV(net present value) or DCF(Discounted cash flow) have been used. But, they cannot properly capture managerial flexibility to adapt and revise later decisions in response to unexpected market development. In a constantly changing and always uncertain marketplace, managerial operation flexibility and strategic adaptability have become vital in order to successfully capitalize on favorable future investment opportunities and limit losses from adverse market development. For the alternatives of conventional static decision-making approaches, new concept of using real options is introduced. Real option theory is based on financial option's characteristics and checks every revision interval whether situation have changed favorable to decision maker or not. In advantageous situation, the decision maker has only to go on. In contrast, with unfavorable situation, he abandons the investment immediately. In this aspect, real option model is more suitable in very uncertain and dynamic business environment in that it can provide the opportunity to cope with flexibility. This paper suggests efficient and effective R&D investment strategy by using real options model. In addition, this paper compares financial options and real options.

• The Journal of Fisheries Business Administration
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• v.42 no.1
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• pp.37-55
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• 2011

This study is to examine the economic effects of seaweed forest creation project in the case of Jeju Woodo Seokwang－ri. Seaweed forest creation project will raise up the quality and quantity of coastal fisheries resource and improve the structure of coastal ecosystem as a project the recovery of coastal fisheries resource against barren ground like whitening event. The economic effect by seaweed forest creation project can be found not only in the income increase of fishermen but also in reduction of carbon dioxide. The results of this study are summarized as follows: First, the income increase effect of fishermen has economic value of 26,945 thousand won under a 30-year cash flow based on a 8.5% discount rate. This suggests that the seaweed forest creation project increases income of fishermen. Second, the reduction effect of carbon dioxide has economic value of 1,083 thousand won per year. This indicates that the seaweed forest creation project reduces carbon dioxide. In conclusion, the results of this study suggest the seaweed forest creation project has economic value in the case of Jeju Woodo Seokwang-ri.

• ETRI Journal
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• v.25 no.4
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• pp.258-265
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• 2003

In our study, we extracted the market, finance, and government factors determining R&D investment of individual firms in the IT industry in Korea. We collected the financial data of 515 individual firms belonging to IT and non-IT industries between 1980 and 1999 from the Korea Investors Service's database and investigated the empirical relationship between the factors using an ordinary regression model, a fixed effects model, and a random effects model. The main findings of our study are as follows: i) The Herfindahl Index variable representing the degree of market concentration is statistically insignificant in explaining R&D expenditures in the IT manufacturing industry. ii) Assets, which is used as a proxy variable for firm size, have a positive and statistically significant coefficient. These two results suggest that the Schumpeterian Hypothesis may be only partially applied to the IT manufacturing industry in Korea. iii) The dividend variable has a negative value and is statistically significant, indicating that a tendency of high dividends can restrict the internal cash flow for R&D investment. iv) The sales variable representing growth potential shows a positive coefficient. v) The subsidy as a proxy variable for governmental R&D promotion policies is positively correlated with R&D expenditure. This suggests that government policy has played a significant role in promoting R&D activities of IT firms in Korea since 1980. vi) Using a dummy variable, we verified that firms reduced their R&D investments to secure sufficient liquidity under the restructuring pressure during Korea's 1998 and 1999 economic crisis.

• Journal of applied mathematics & informatics
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• v.15 no.1_2
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• pp.109-126
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• 2004

This paper deals with two problems of optimal portfolio strategies in continuous time. The first one studies the optimal behavior of a firm who is forced to withdraw funds continuously at a fixed rate per unit time. The second one considers a firm that is faced with an uncontrollable stochastic cash flow, or random risk process. We assume the firm's income can be obtained only from the investment in two assets: a risky asset (e.g., stock) and a riskless asset (e.g., bond). Therefore, the firm's wealth follows a stochastic process. When the wealth is lower than certain legal level, the firm goes bankrupt. Thus how to invest is the fundamental problem of the firm in order to avoid bankruptcy. Under the case of different lending and borrowing rates, we obtain the optimal portfolio strategies for some reasonable objective functions that are the piecewise linear functions of the firm's current wealth and present some interesting proofs for the conclusions. The optimal policies are easy to be operated for any relevant investor.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.59
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• pp.159-178
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• 2013

International factoring is very useful to transfer credit risk, to promote cash flow, to collect debt and to reduce cost and expenses. However, International factoring system in china shows imperfection especially in gap of legal vacuum and its limit to be developed. Here I suggest a practical alternative for development of International factoring system in china as follow. First, legal environment in China for factoring system should be rearranged. Even law and contract law have relative clauses for factoring system there are many difficulty to be applied. It is necessary to prepare legal ground for factoring system. Second, without recourse for International factoring system should be fixed. Without recourse is the essential point for factoring system in international trade. In fact chinese factors are partially applied only for those big global companies. However International factoring system is especially useful for small-medium companies lacked of a good credit rating. It is necessary to promote special factors by combining financial organizations as it does in developed countries. Third, they need to make legal ground to prohibit unlicensed factoring companies. Forth, they need to educate usefulness of factoring system. The settlement system in China is to be developed by systematic researches and promotion for International factoring system.

• Transactions of the Korean hydrogen and new energy society
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• v.28 no.3
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• pp.231-237
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• 2017

With worldwide efforts to increase the portion of renewable energy for $CO_2$ reductions, a lot of attention has been paid to P2G (power-to-gas) in Europe and Japan to efficiently utilize the surplus electricity. In this paper, economic feasibility analysis has been carried out for P2G using PEM water electrolysis by reflecting current economic status in Korea. In addition, efficiency and electricity price required to be competent in Korean market were provided. Based on cash flow diagrams, unit production costs for $H_2$ and $CH_4$ were estimated and profitability of P2G using PEM water electrolysis was analyzed.

• Journal of Distribution Science
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• v.12 no.5
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• pp.61-69
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• 2014

Purpose - Many studies report that returns on hedge portfolios that eliminate particular risk types are abnormal from traditional asset pricing models' perspectives. This study examines the pervasiveness of anomalous returns conditioned on business cycle and group size. Research design, data, and methodology - Using KOSPI and KOSDAQ market data from July 1991 to December 2013, we categorize stocks into appropriately sized groups, and dichotomize our sample periods into expansion and recession periods then, we construct hedge portfolios by sorting stocks by anomaly variables and calculate their returns. Results - Four anomalies, including earnings yield, net stock issue, total asset growth, and liquidity appear pervasive across all groups for the entire sample period. However, only the hedge returns of net stock issues are significant across all group sizes during both expansion and recession. Conclusions - A net stock issue can be an appropriate proxy for expected growth of book equity for all group sizes in recessions. This finding could provide insights to investment industry participants and to researchers interested in the relationship between expected growth of book equity and business cycle risk.

• Journal of Construction Engineering and Project Management
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• v.2 no.4
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• pp.42-45
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• 2012

In construction industry, the term 'procurement' is considered as a project based job where clients and contractors are always keen to observe performance indicators. These indicators represent financial and non-financial efficiency of project activities. Among these, the monitoring of financial indicators such as cost monitoring is an ongoing process and its importance cannot be undermined during the project life cycle. It can be monitored by using traditional approach of direct reporting of actual cost against budget. However, the comparison of budget versus actual spending does not indicate the worth of the work which is completed at any given time. This approach does not represent the true cost performance of the project. Because of these limitations, this paper discusses the applications of Earned Value Analysis (EVA) for cost monitoring of construction projects in Malaysia. Besides traditional approach, EVA is a three-dimensional approach that compares three cost indicators i.e. the budgeted value of work scheduled with the earned value of physical work completed and the actual cost of work completed. Therefore, cost monitoring by EVA is an objective measure of actual work performed. This paper uses a case study, an example application of EVA as a cost monitoring tool. This case study reaffirms the benefits of using EVA for project cash flow analysis and forecasting.