• Journal of the Korea Academia-Industrial cooperation Society
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• v.17 no.8
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• pp.127-132
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• 2016

This study evaluated the economic value of the development of a new variety of Citrus unshiu using the income approach, Net Present Value (NPV), Internal Rate of Return (IRR), and Benefit/Cost (B/C) ratio. The new variety of Citrus unshiu was developed by the national institute of horticultural and herbal science in Korea, rural development administration. The technological evaluation of the development of a new variety of Citrus unshiu can be used to improve the efficiency and practicality of the development of a new variety of citrus. From the research results, the technological value of development of a new variety of Citrus unshui was evaluated at 109,455(discount rate=8%, minimum), 195,040(discount rate=4%, maximum), and 145,375(discount rate=6%, average) million won. The IRR was 51.4%, which was greater than the discount rate(4~8%). The NPV was evaluated at 145.3 billion won(discount rate=6%, average), 195.0 billion won(discount rate=4%, maximum) and 109.4 billion won(discount rate=8%, minimum), all of which were greater than 0. The B/C ratio was evaluated at 60.9(discount rate=6%, average), 81.3(discount rate=4%, maximum) and 46.1(discount rate=8%, minimum), all of which were greater than 1. Therefore, the economic validity of the development of a new variety of Citrus unshiu was identified by this technological evaluation.

• Analyses & Alternatives
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• v.4 no.1
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• pp.105-123
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• 2020

This study analyzes the risk selection behavior of Japanese households. The study approaches the view of 'the hyperbolic discount' which is used in behavioral economics based on the rise in mortgage lending by low-income households in the late 2000s. The study focuses on how households risk preferences vary by income levels. The study analyzes the relationship of attitude of household interest rate risk using Binomial Logistic and Heckman two-step estimation method assuming that there are only two types of Adjustable-Rate Mortgage and Fixed-Rate Mortgage. As a result of the empirical analysis, low-income households annual income tend to have a higher proportion of housing debt as same as higher interest rate risk preferences households in proportion to income growth and interest rate risk preferences. Those results indicate that there is possibility of a hyperbolic discount on low-income households in Japan, and support the hypothesis that low-income households are relatively higher household debt ratio because of high utility due to home purchase in the near future (short-term).

• Asia-Pacific Journal of Business
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• v.9 no.4
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• pp.67-84
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• 2018

This study is about comparing coal thermal plant to LNG combined power plant in respect of environmental and economic cost analysis. In addition sensitive analysis of power cost and discount rate is conducted to compare the result of change in endogenous and exogenous variable. For environmental assessment, when they generate 10,669GWh yearly, coal thermal power plant emits sulfur oxides 959ton, nitrogen oxide 690ton, particulate matter 168ton and LNG combined power plant emits only nitrogen oxide 886ton respectively every year. Regarding economic cost analysis on both power plants during persisting period 30 years, coal thermal power plant is more cost effective 4,751 billion won than LNG combined taking in account the initial, operational, energy and environmental cost at 10,669GWh yearly in spite of only LNG combined power plant's energy cost higher than coal thermal. In case of sensitive analysis of power cost and discount rate, as 1% rise or drop in power cost, the total cost of coal thermal power plant increases or decreases 81 billion won and LNG combined 157 billion won up or down respectively. When discount rate 1% higher, the cost of coal thermal and LNG combined power plant decrease 498 billion won and 539 billion won for each. When discount rate 1% lower, the cost of both power plant increase 539 billion won and 837 billion won. With comparing each result of change in power cost and discount rate, as discount rate is weigher than power cost, which means most influential variable of power plan is discount rate one of exogenous variables not endogenous.

• Journal of Distribution Science
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• v.18 no.11
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• pp.31-39
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• 2020

Purpose: This study attempts to explain why online luxury shopping malls have implemented a difficult registration process and membership fees. These features weaken online shopping convenience, one of the major reasons why people shop online instead of offline. Therefore, this study scrutinizes the effects of membership features on trust, focusing on the moderating effects of registration difficulty and membership fees. Research design, data and methodology: A survey method with a total of 296 survey data was used. A 2 × 2 × 2 factorial design was employed. The three independent variables are price discount rate (20% vs. 70%), registration difficulty (low vs. high), and membership fees (yes vs. no). Results: The results reveal that a price discount rate has a negative effect on trust, whereas membership fees and registration difficulty moderate its negative effect on trust. Conclusions: A high price discount rate lowers trust for online luxury shopping malls. Meanwhile, registration difficulty and membership fees can be used to prevent consumers from losing trust caused by the high price discount rate. Therefore, registration difficulty and membership fees are signals implying that not everyone can use these private online shopping malls, which provide low prices for luxury items.

• Journal of Korea Technology Innovation Society
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• v.11 no.2
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• pp.241-263
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• 2008

Within any income approach, a discount rate is used to convert some projected free cash flow to its presented value. In case of valuing companies, the most frequently used discount rate is the weighted average cost of capital(WACC) at the aggregate level. But technology valuation is different to discounting aggregate corporate cash flow since it is concerned about individual Intellectual property. Therefore, blindly applying standard discount rate such as WACC in technology valuation is unlikely to lead to the right result. The primary focus of this paper is to establish the structure of discount rate for technology valuation and to suggest the method of estimation. To determine an appropriate discount rate for technology valuation, the level of technology risk, market risk and competitive risk should be included in the structure of discount rate. This paper suggests the build-up model which consists of three components as a expansion of the CAPM. It includes (1) a risk-free rate of return, (2) general market risk premium and beta and (3) intellectual property risk premium related to technology risk and specific target market risk. However, there is no specific check list for examining the intellectual property risk until now and no specific method for quantifying its risk into risk premium. This paper developed the 10 element to determine the level of the intellectual property risk and applied estimation function such as linear function, natural log function and exponential function to transform the level of risk into risk premium. The limitation of this paper is that the range of intellectual property risk premium is inferred based on the information of foreign and domestic valuation agency. Finally, this paper explored the development of an intellectual property discount rate for technology valuation and presented the method in order to quantify the intellectual property risk premium.

• Communications of the Korean Mathematical Society
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• v.33 no.1
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• pp.345-360
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• 2018

In finance, barrier options are options contracts with a payoff that depends on whether the price of the underlying asset hits a predetermined barrier level during the option's lifetime. Based on exotic options and random fluctuations of interest rates in the marketplace, we consider discount barrier options with a stochastic interest rate driven by the Hull-White process. This paper derives the closed-form solutions of the discount barrier option and the discount double barrier option using Mellin transform methods and the PDE (partial differential equation) method of images.

• Current Research on Agriculture and Life Sciences
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• v.32 no.4
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• pp.231-235
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• 2014

This study performed a benefit cost analysis of an automatic eggshell crack detection system. Based on various cost benefit analysis methods, including the net present value (NPV), internal rate of return (IRR), and benefit cost ratio (B/C Ratio), the automatic eggshell crack detection system was confirmed to have economic validity. The NPVs were 175,035,645 won at a 5% discount rate and 129,082,393 won at a 10% discount rate. Plus, the IRRs were 0.686 at a 5% discount rate and 0.660 at a 10% discount rate. Finally, the B/C ratios were 1.981 at a 5% discount rate and 1.900 at a 10% discount rate.

• Journal of Distribution Science
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• v.16 no.12
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• pp.13-21
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• 2018

Purpose - Because it is not possible to assess the quality of service products before experiencing them, one feature of a service product is quality uncertainty; hence consumers may react sensitively to pricing. It is necessary to investigate how different pricing strategies affect consumer purchase intention depending on the level of service quality uncertainty. Research design, data, and methodology - The authors have investigated the potential impact of the level of service quality uncertainty, price discount rate and presentation method on consumer purchase intention. A play was selected as an experimental stimulus, and Vietnamese consumers were surveyed to verify the hypotheses. Results - When uncertainty regarding service quality is low, consumer purchase intention is higher when the price discount rate is high or when the price is low. When uncertainty regarding service quality is high, if the normal price, discount rate, and discounted price are presented simultaneously, consumer purchase intention is higher when the price discount rate is low, but when only the discounted price is presented, purchase intention is higher when the price discount rate is high. Conclusions - The results of this study can provide valuable practical implications for pricing for service products with quality uncertainty.

• Journal of Environmental Policy
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• v.12 no.4
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• pp.71-92
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• 2013

Unlike general public investment projects, when it comes to environmental public investment projects, there is a gap between those who pay the costs, and those who receive the benefits. This is because of the long term nature of environmental investments, which entails that the majority of the costs are paid by the current generation, while the benefits are reaped by future generations. Because of this, when the social discount rate is set at a standard, singular rate, an issue of relative underestimation of the benefits reaped by future generations may occur during the analytic process. This paper begins with the recognition of this problem, and attempts to estimate a suitable social discount rate that can be applied to environmental investment projects. Taking into account recent economic situations, the social discount rate is currently being estimated at between 2.9 ~ 4.9%. Also, this paper used preliminary feasibility studies that took place so far, to analyze the standard pattern of benefit generation. This revealed that alterations in social discount rates can bring significant changes in economic feasibility test results. Simulation results showed that roughly 6% of B/C ratios could be increased by 1%p. resulting in a decrease in social discount rates. Also if we use hyperbolic discount rates, instead of using the current singular rate, there would be a meaningful increase in the benefits for the future generation.

• Environmental and Resource Economics Review
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• v.24 no.1
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• pp.85-107
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• 2015

This study analyzes the effect of applying hyperbolic social discount rate onto the results of benefit-cost analysis of environmental public investment projects in Korea. In order to check the application possibility to the actual feasibility study, the discount factors generated by hyperbolic function, rather than traditional exponential one, would be applied to the benefit and cost data from the pre-feasibility studies which peformed for environmental public investment projects. The results of this study shows that using hyperbolic social discount rate is effective for enhancing test results, only under the condition of which the full expansion of the time periods of analysis is satisfied. According to the simulation results of this study, to achieve higher benefit/cost ratio by using hyperbolic social discount rate, the period should be increased up to 120 to 150 years at least.