• Journal of Digital Convergence
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• v.10 no.7
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• pp.11-22
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• 2012

Intangible assets are the important tool which decides upon economic wealth and development of knowledge-information economy. We have to make effective use of intangible assets in order to assure surplus earnings, competitive superiority. The importance of intangible assets, especially patent right, may be properly understood only when their values are assessed adequately. It is very significant to appraise rationally patent right value from finance support, technology transaction, investment decision, M&A, legal proceedings, strategy and etc. Thus the purpose of this study is to evaluate the economic value of a patent right using DCF(Discounted-Cash Flow Method). This paper presents the basic model, related principles and standards of valuation, and then, case analysis of patent right valuation using DCF.

• Korean Journal of Organic Agriculture
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• v.20 no.4
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• pp.543-561
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• 2012

This work is for reasonable valuation method of environmental-friendly and organic company. Reasonable valuation method is principal for the sound development, the reasonable investment and the growth of stock market. This study proposes valid valuation and method for environmental-friendly and organic company. The author selected 4 companies from certificate list of environmental-friendly and organic food and LOHAS (Lifestyles Of Health And Sustainability) food of Korean standards association. Applying financial audit report of 5 years, the author output 5 variables from each companies by using Growth Option model of Real Option model. And the author valuated companies by adding option value calculated with these variables and residual value discounted with cash flow discounted method. Company values from ROV model were 1.71 time higher than DCF model. This results show that the value of environmental-friendly and organic food company may own high option premium, that is the growth factor.

• Plant Journal
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• v.8 no.3
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• pp.42-48
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• 2012

Under traditional analysis of the capital budgeting, NPV, it is assumed that management cannot react to deviation from the expected scenario of cash flow at the time of evaluation. In practice, however, it is less likely that the expected scenario will come true when new information arrives and uncertainty is resolved. Uncertainty and risk can be influenced through 'managerial flexibility', which becomes a central instrument for value creation. Real option framework including option to defer, option for staged investment, option to alter, option to abandon, option to switch, etc. takes this managerial flexibility into account. Therefore, it is more appropriate to use real option method to evaluate the project than the traditional DCF(discounted cash flow) tool if the firm has high volatility of the expected returns.

• IE interfaces
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• v.12 no.2
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• pp.285-293
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• 1999

This paper analyzes the facility investment appraisal process of a real world shipyard and proposes several improving points. For this purpose the investment appraisal sheets are investigated in terms of the theory of the discounted cash flow (DCF) method. Through this investigation, the differences between the theory and its application are clarified and it is tried to resolve the gab by applying the DCF method appropriately including explicit use of actual cash flows in revenue and expense expressions. It is also proposed that some portion of the capital loss caused by defending facility sales may not be the sunk cost and that the portion can conceptually be calculated by the difference between economic value and sales price.

• Journal of Navigation and Port Research
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• v.33 no.7
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• pp.469-476
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• 2009

Recent collapse of shipping market right after unprecedent surge clearly demonstrates that shipping industry is extremely risky. Due to the volatile movements of the freight rates, investors tend to ask higher rate of return; higher required return reduces the total net present value of the investment project. For several decades, the Discounted Cash Flow(DCF hereafter) analysis has been the most frequently used valuation technique. However, the main problem of the DCF analysis is its assumption that the discount rate would stay the same during the project life. In other words, it usually does not address the decisions that managers have after a project has been accepted. The purpose of this study is investigate a new valuation method of investment: the Real Option Analysis(ROA hereafter) on ship investment. By replacing the existing valuation methods with the new one, the research will present a new perspective on investment with uncertainty. While uncertainty increases risk of investment and consequently discounts the value of it in the traditional feasibility analysis, in the ROA, a new valuation method which will be addressed in the research, uncertainty means some additional value of flexibility so that the tool can help investors produce more accurate decisions. Contrary to the DCF analysis, the ROA takes managerial flexibilities into account. In reality, capital budgeting and project management is typically dynamic, rather than static in nature. The ROA finds and assesses the values of managerial flexibilities or real options in the investments. The main structures of the research will be as follows: (1) overview of the ship investment project, (2) evaluation of the project by the Net Present Value analysis, (3) evaluation of the same project by the Real Option Analysis, (4) comparision of the two techniques.

• Asia-pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology
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• v.7 no.12
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• pp.101-110
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• 2017

According to the Statistics Korea in 2016, 56.9% of companies do not fairly pay compensation for employee invention, despite the increasing proportion of the inventions in corporations. One reason is that the objective calculation method for employee and patent's contribution and the clear standard of fair compensation have not been established. Therefore, this study proposes a new calculation method using DCF (Discounted cash flow) and AHP (Analytical hiearchy process) methodology to calculate the fair amount of employee invention compensation, and verified it through real case examples. As a result, 2.3 times higher amount of compensation was calculated than the previous approach. This study is meaningful that it provided objective compensation criteria that could more protect the inventor in the situation which the clear criteria for the calculation of fair compensation are not established. This methodology is expected to be applicable for SMEs as employee invention compensation.

• Management & Information Systems Review
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• v.28 no.4
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• pp.27-44
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• 2009

Economic value of a certain technology is of great interest and importance in a wide variety of investment circumstances. These vary from companies considering investing in R&D projects, to venture capitalists funding start-up companies. However, such valuation is extremely difficult in any case, and the cost of failure can be very high. Many techniques have been proposed to assist managers facing this issue, from traditional discounted cash flow analysis to more recent methods based on real options. In the meantime, the discounted cash flow method has limitations in applying the valuation of technology. At the same time, there have been various solutions to overcome theoretical problems of the method. Real options have been thought as a solution. However, there are another problems in using them in real world. This paper reviews the previous studies on the valuation of technology in several aspects, discusses the practicability of the various methods available, and explore the application of a hybrid model, which aims to make these rather aore the ideas more accessible to practicing managers.

• 한국경영정보학회:학술대회논문집
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• 2008.06a
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• pp.129-134
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• 2008

Dividend is one of essential factors determining the value of a firm. According to the valuation theory in finance, discounted cash flow (DCF) is the most popular and widely used method for the valuation of any asset. Since dividends play a key role in the pricing of a firm value by DCF, it is natural that the accurate prediction of future dividends should be most important work in the valuation. Although the dividend forecasting is of importance in the real world for the purpose of investment and financing decision, it is not easy for us to find good theoretical models which can predict future dividends accurately except Marsh and Merton (1987) model. Thus, if we can develop a better method than Marsh and Merton in the prediction of future dividends, it can contribute significantly to the enhancement of a firm value. Therefore, the most important goal of this study is to develop a better method than Marsh and Merton model by applying artificial intelligence techniques.

• Journal of Korea Port Economic Association
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• v.28 no.3
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• pp.235-257
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• 2012

Recently the role of ports has been changed to satisfy flexibly needs of demands in global economy. A new concept for ports is not just a place for international trade but an important nodal point in logistics chain. The changing environment like this trend creates a high degree of uncertainty and leaves port managers confused with the question how to respond effectively to dynamic market. The latest studies provide that the port must have a good hinterland to achieve competitive advantages in a logistics chain. Korean Government announced "The Master Development Plan for Port Logistics Parks in Korea" in 2006. This contains the plan of hinterland construction of Busan New Port to achieve the status of logistics hub in Asian market. Previous studies rely solely on traditional DCF(discounted cash flow) analysis for investment of hinterland. However DCF method does not include irreversibility, uncertainty and the choice of timing for investment project. This thesis introduces a ROPM(real options pricing model) which overcomes the limitations of traditional valuation methods. The option valuations in this study utilize the Black-Scholes model, the binomial model and the MonteCarlo simulation to value investment opportunity of a port hinterland. In this thesis, an attempt is made to modify the NPV criterion by incorporating the real options approach, and its application is demonstrated in a hinterland construction investment plan. This research has conducted an empirical analysis by calculating economic value of the investment for a hinterland of Busan New Port.

• New & Renewable Energy
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• v.16 no.4
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• pp.65-75
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• 2020

The value of tangible assets depreciates over their useful life and this depreciation should be adequately reflected in any tax or financial reports. However, the method used to calculate depreciation can impact the financial performance of solar projects due to the time value of money. Korean tax law stipulates only one method for calculating the depreciation of solar photovoltaic facilities: the straight-line method. Conversely, USA's tax law accepts other depreciation methods as solar incentives, including the modified accelerated cost recovery system (MACRS) and Bonus depreciation method. This paper compares different depreciation methods in the financial analysis of a 10 MW solar system to determine their effect on the financial results. When depreciation was calculated utilizing the MACRS and Bonus depreciation method, the internal rate of return (IRR) was 10.9% and 16.4% higher, respectively, than when the Korean straight-line depreciation method was used. Additionally, the increased IRR resulting from the use of the two US methods resulted in a 20.5% and 27.4% higher net present value, respectively. This shows that changing the depreciation calculation method can redistribute the tax amount during the project period, thereby increasing the discounted cash flow of the solar project. In addition to increasing profitability, USA's depreciation methods alleviate the uncertainty of solar projects and provide more flexibility in project financing than the Korean method. These results strongly suggest that Korean tax law could greatly benefit from adopting USA's depreciation methods as an effective incentive scheme.