1) Projects implemented in multiple stages must decide whether to anticipate infrastructure for future stages. Anticipating can reduce total capital expenditures (CapEx) but increases upfront costs.
2) A general rule was deduced to evaluate the decision: compare the present value (PV) of the integrated infrastructure option versus the non-integrated option.
3) The rule shows the PV comparison depends on how much capital is anticipated (β), the total CapEx savings from integrating (α), and the time between stages (N). If N is less than the break-even period, anticipating infrastructure maximizes NPV and IRR.
In this paper, a self-financing strategy is proposed to provide continuity of investments in scenarios of restricted access to capital. The strategy divides project scope into individual units capable of autonomous production, implemented sequentially in phases. Each phase "pays" for the implementation of successor phases. We demonstrate that the proposed strategy is effective in enabling projects under conditions of constrained access to capital, and can reduce the capital required substantially.
Highlights on Earned Value Management ElementsYahya Khatib
Earned value management is an important process for monitoring projects performance against schedule and budget, it helps providing an early alarm on slippage or overrun of a project and enables addressing them before becoming major. Whether you are a project manager, a cost controller or an engineer working in construction management disciplines; you should have encountered the two indicators for earned value management; the Cost Performance Index (CPI) and the Schedule Performance Index (SPI). This paper demonstrates what is behind calculating the values of these indicators, and what should be done in a typical midsize construction company to have the project data readily available to serve the earned value calculation.
In this paper, a self-financing strategy is proposed to provide continuity of investments in scenarios of restricted access to capital. The strategy divides project scope into individual units capable of autonomous production, implemented sequentially in phases. Each phase "pays" for the implementation of successor phases. We demonstrate that the proposed strategy is effective in enabling projects under conditions of constrained access to capital, and can reduce the capital required substantially.
Highlights on Earned Value Management ElementsYahya Khatib
Earned value management is an important process for monitoring projects performance against schedule and budget, it helps providing an early alarm on slippage or overrun of a project and enables addressing them before becoming major. Whether you are a project manager, a cost controller or an engineer working in construction management disciplines; you should have encountered the two indicators for earned value management; the Cost Performance Index (CPI) and the Schedule Performance Index (SPI). This paper demonstrates what is behind calculating the values of these indicators, and what should be done in a typical midsize construction company to have the project data readily available to serve the earned value calculation.
Grey and Green Infrastructure Benefit Cost, Return on Investment Analysis for...Robert Muir
This presentation was made to the Southern Ontario Municipal Stormwater Discussion Group on September 27, 2018 in Brantford, Ontario. It describes benefit-cost analysis to show the return on investment (ROI) of infrastructure improvements to reduce flood damages (insured and total), and to achieve other benefits including erosion mitigation and water quality improvements. Earlier benefit cost analyses for projects ranging from the Winnipeg floodway to the Stratford, Ontario storm system master plan are shown. The benefit-cost ratio of an Ontario flood control study is shown including a comparison of grey and green infrastructure cost effectiveness - analysis shows the grey infrastructure solution can meet the current Disaster Mitigation Adaptation Fund (DMAF) benefit/cost threshold of 2:1 required to be eligible for federal funding. In addition, city-wide analysis of grey infrastructure storm and sanitary system upgrades and green infrastructure / low impact development infrastructure strategies is summarized.
Results show that the grey infrastructure solution can meet the DMAF benefit/cost threshold of 2:1 but that the benefit/cost of green infrastructure is substantially below it considering flood reduction benefits. When other benefits are considered, and targeted implementation of green infrastructure is considered (e.g., representing 25% of the urban area with limited overland drainage design standards) and considering additional benefits including a substantial 'willingness to pay' estimate for water quality improvements, costs continue to exceed benefits. The insurance industry and some affiliated research groups have suggested that natural infrastructure or green infrastructure should be considered to improve climate resilience and reduce flood damages - this analysis would suggest that approach is misguided and could misdirect scare resources to ineffective strategies.
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Grey and Green Infrastructure Benefit Cost, Return on Investment Analysis for...Robert Muir
This presentation was made to the Southern Ontario Municipal Stormwater Discussion Group on September 27, 2018 in Brantford, Ontario. It describes benefit-cost analysis to show the return on investment (ROI) of infrastructure improvements to reduce flood damages (insured and total), and to achieve other benefits including erosion mitigation and water quality improvements. Earlier benefit cost analyses for projects ranging from the Winnipeg floodway to the Stratford, Ontario storm system master plan are shown. The benefit-cost ratio of an Ontario flood control study is shown including a comparison of grey and green infrastructure cost effectiveness - analysis shows the grey infrastructure solution can meet the current Disaster Mitigation Adaptation Fund (DMAF) benefit/cost threshold of 2:1 required to be eligible for federal funding. In addition, city-wide analysis of grey infrastructure storm and sanitary system upgrades and green infrastructure / low impact development infrastructure strategies is summarized.
Results show that the grey infrastructure solution can meet the DMAF benefit/cost threshold of 2:1 but that the benefit/cost of green infrastructure is substantially below it considering flood reduction benefits. When other benefits are considered, and targeted implementation of green infrastructure is considered (e.g., representing 25% of the urban area with limited overland drainage design standards) and considering additional benefits including a substantial 'willingness to pay' estimate for water quality improvements, costs continue to exceed benefits. The insurance industry and some affiliated research groups have suggested that natural infrastructure or green infrastructure should be considered to improve climate resilience and reduce flood damages - this analysis would suggest that approach is misguided and could misdirect scare resources to ineffective strategies.
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
“ help.mbaassignments@gmail.com ”
or
Call us at : 08263069601
A Perda Máxima Provável (PML) é a estimativa da perda máxima que poderia ser suportada pelas seguradoras como resultado da ocorrência de um cenário de risco considerado pelo subscritor dentro dos domínios da probabilidade.
Construções industriais são empreendimentos únicos, significando que não há muitos dados de falhas ou eventos anteriores semelhantes servindo de referência, e dinâmicos, porque a configuração local muda à medida que o progresso físico da construção avança. Neste contexto, a estimativa PML, antes da construção, é difícil, por exemplo devido à imprecisão da estimativa de custo dos danos como % do custo de construção, uma vez que o próprio custo de construir algo pela primeira vez é, por sua vez, uma estimativa imprecisa. Além disso, as ações necessárias para reparar o dano às vezes podem não ter nenhuma semelhança com o trabalho necessário para construir o ativo danificado e, portanto, não integra a estimativa de investimento para construção. As condições que irão operar para criar o evento que produzirá a perda do cenário PML não são evidentes na fase de subscrição, ou mesmo quando da realização de vistorias de Engenharia de Risco, não sendo passíveis de avaliação apenas por inspeção direta ao longo da construção.
Este trabalho apresenta um método quantitativo e baseado na opinião de especialistas, para avaliação do PML em construções. Nele, a análise de consequências avalia a extensão dos danos com base em fatores objetivos como altura do ativo, materiais temporários e definitivos envolvidos na construção, conformidade com normas de segurança, entre outros.
E apresentada uma metodologia para desenvolvimento de modelos paramétricos aplicáveis a estimativas de custo de equipamentos e um caso pratico de aplicacao para estimativas conceituais de transportadores de correias.
É apresentado um novo método baseado em índices, para avaliação de, trade-offs na fase conceitual dos projetos de engenharia. Considerando riscos de processo, químicos, locacionais e de execução, provê suporte objetivo à tomada de decisão, em condições onde relativamente pouca informação está
disponível.
A prática, ágil e inédita, foi apresentada no Comitê de Excelência e Inovação na Mineração, da Câmara de Comércio Brasil-Alemanha de São Paulo (AHK), em 02-abr-2019.
Dinâmica das contratações governamentais: Propostas para eficiência e satisfa...Tito Livio M. Cardoso
O presente artigo tem como objetivo apresentar uma proposta de eficiência e satisfação de necessidades públicas relacionadas à contratação governamental, dados os notórios casos de baixa eficiência em investimentos de interesse público em todo o mundo. Para entender os vários fatores envolvidos, um estudo comparativo foi realizado primeiro entre os processos de contratação pública e seus requisitos em diferentes países. Um caso genérico e hipotético foi então modelado na forma de um sistema dinâmico simples relacionado à contratação do governo. Dessa forma, os autores sugerem que, mesmo em um sistema de seleção baseado no menor preço, é possível obter qualidade de projeto e construção, uma vez que algumas condições, que serão apresentadas ao longo do artigo, são implementadas.
DYNAMICS OF GOVERNMENT CONTRACTING: PROPOSALS FOR EFFICIENCY AND SATISFACTION...Tito Livio M. Cardoso
The present work, through the study of dynamics in a simple hypothetical case, suggests the conditions to obtain design and construction quality, even in a selection system based on the lowest price.
Na última década, o ciclo do preço das commodities se tornou mais rápido em relação ao ciclo típico de projetos de capital. Durante o desenvolvimento e implantação de um projeto o mercado pode passar por 2 ou 3 ciclos de reversão de tendência dos preços. Então, a condição atual de mercado não agrega informação útil para a decisão de investimento a qual deve ser definida a partir de uma estratégia de longo prazo e, sempre, respeitando a natureza cíclica das commodities. Utilizando a análise da árvore de eventos de um case baseado em dados reais, este trabalho apresenta conclusões úteis para decisões em investimentos de capital.
Riscos relacionadas a extensao de cronogramas - Schedule extension related risksTito Livio M. Cardoso
This paper presents a new project risks classification, in function of their time dependence, with practical examples. In presented examples it is clear that persistent and incremental risk over time, due to its cumulative nature, may have radical impact on scope, time and project costs. Time-persistent and Time-Increment risks contrary to common sense, as these risks are not reduced, and even increase, when the implementation moves forward in time.
Foi desenvolvido um modelo que permite a análise comparativa, com razoável grau de
detalhe, entre opções de compra à vista com capital próprio, compra financiada ou
arrendamento mercantil operacional.
Otimização da configuração do banco de baterias para navio híbridoTito Livio M. Cardoso
O objetivo deste trabalho foi estabelecer uma configuração do sistema de armazenamento de energia para um navio híbrido que atenda ao requisito de confiabilidade ao menor custo no ciclo de vida. Para isto, são utilizadas técnicas de modelagem e otimização, considerando alternativas comerciais de células Li-Ion e tensões de alimentação do grid do navio compatíveis com as voltagens usuais de equipamentos da indústria, além da possibilidade de introduzir redundância na especificação do banco de baterias.
Utilizing a Self-Financing Strategy for Projects - BRG Review 7-1-2018Tito Livio M. Cardoso
In this paper, a self-financing strategy is proposed to provide continuity of investments in scenarios of restricted access to capital. The strategy divides project scope into individual units capable of autonomous production, implemented sequentially in phases. Each phase “pays” for the implementation of successor phases. We demonstrate that the proposed strategy can be effective in enabling projects under conditions of constrained access to capital and can reduce substantially the capital required.
No presente trabalho, uma estratégia denominada autofinanciamento é proposta e demonstrada a sua viabilidade
para continuidade dos investimentos em projetos industriais em cenários de restrição de acesso ao capital.
Critério de decisão para implantação da infraestrutura em projetos implantado...Tito Livio M. Cardoso
Projetos que serão implantados em múltiplas fases passam sempre por uma discussão importante para definição do escopo de implantação da primeira fase: antecipar, ou não, o investimento em infraestrutura para as fases seguintes?
Artigo apresentado no 68º Congresso Anual da ABM, 2013, apresentando revisão bibliográfica, proposição e caso prático de aplicação de uma metodologia para análise de riscos em projetos envolvendo novas tecnologias.
Efeitos da incerteza na produtividade de serviços sobre o custo e prazo do pr...Tito Livio M. Cardoso
Bom planejamento é uma condição necessária, entre outras, para obter assertividade nas estimativas de prazo e custo de um projeto industrial ou de infraestrutura. Além da imprecisão de quantidades e da incerteza dos preços, a imprecisão nas produtividades pode afetar ambas as estimativas de custos e prazo de um projeto. Este trabalho analisa casos de montagem de transportador e ponte rolante para examinar o efeito da imprecisão nas produtividades de serviços sobre o prazo e custo dos projetos.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Decision criterion for anticipation of the infrastructure in staged projects
1. Decision criterion for anticipation of the infrastructure in staged projects
Tito Livio M. Cardoso
São Paulo, Brazil, 24-Oct-2018
Projects that will be deployed in multiple stages always go through an important discussion to define the scope of
implementation of the first stage: anticipate or not, the investment in infrastructure for the following stages?
In general, the option to anticipate results in a total CapEx, of the two stages, smaller, for example, deploying in the first
stage all the earthworks and civil works for pump station, water treatment, drainage and secondary substations, leaving
to the next stage only the equipment and distribution lines. The same case occurs in the anticipation of the civilian base
of transporters, or construction of the mill building that will house the mills of the 2 stages, for example. In this option
the infra will be integrated, that is, 100% shared between the production lines at the end of the 2nd stage.
The alternative of not anticipating anything produces a non-integrated infra-scope, where each deployment stage
includes a complete infrastructure, with a smaller size that corresponds only to the need associated with the productive
capacity of a stage. This approach, while not minimizing and CapEx below the two stages, should produce a smaller
CapEx for the 1st stage and present greater layout flexibility since the non-shared structures need not be adjacent.
This decision on the option to adopt is decisive for the engineering project and different managers stand in a
controversial way on the subject. In recent work, a manager has asserted himself on the integrated infrastructure
option: "If it is known to have expansion, it is absurd to make a 'cast' project that makes the company spend more if it
wants to expand." Another manager has already achieved a significant CapEx reduction by eliminating all anticipation of
infra for the 2nd stage and argues that this decision maximizes the NPV of the project. Who's right?
Answer: It depends...
It depends on:
Additional investment in Stage 1 to advance in integrated infrastructure option
"Saving", i.e. the total cost reduction (along of the all stages) on the integrated infrastructure option
When will be the construction of stage 2
t = 0 t = 6 years
CapEx in infra
= US$ 200 M
CapEx in infra
= US$ 200 M
Stage 1
Cap. Total:
15 MTPY
Stage 2
Cap. Total:
30 MTPY
t = 40 years
A) Example, without infrastructure
anticipation.
t = 0 t = 6 years
CapEx in infra
= US$ 240 M
CapEx in infra
= US$ 120 M
Stage 1
Cap. Total:
15 MTPY
Stage 2
Cap. Total:
30 MTPY
t = 40 years
B) Example, with infrastructure
anticipation.
2. The company can always carry out another investment with the capital that would be immobilized in the integrated
infra-option. This alternative investment may monetize more than the larger CapEx total difference in the non-
integrated option if sufficient time is given. That is, for the same project, the integrated option can add or disaggregate
value depending on the time interval between the implementation of each stage. Like any decision-making process in
industrial projects, we need to calculate the present value of each option to identify the one that maximizes value to our
particular case.
Next we will deduce a general rule that supports the decision between anticipating or not the investment in an
integrated infrastructure for projects implemented in two stages. Let's assume that the total OpEx will be approximately
the same, with or without integrated infrastructure.
1) Option model without integration, i.e., identical and individual infrastructures for each stage:
The total investment without integration, ITSI, is the investment bro to implement the individual infra of each stage, ITSI
= 2 x ISI. That is, we invested ISI in year zero (today) and asaving ISI in year N. If the 2nd stage will be implemented in
year N, the Present Value of this investment will be:
1
1
(1 )
SI N
VPI ISI
i
Where i is the annual interest rate that discounts the capital invested in year N.
2) Model integrated option, i.e., common infrastructure in anticipation of Stage 1:
The total investment with integration, ITCI, presents the saving in relation to the non-integrated option:
ITCI = (1-) ITSI = 2 (1-) ISI
In practice is between 20% and 40%. Investments in the infra stage 1 and 2 will no longer be the same. Integration
investment, ICI, in stage 1 is greater. Be (0.5 to 1.0) as the ratio of the total integration with infrastructure
investment, ITCI is disbursed in the 1st stage, ie as is "d anticipates the" capex below common to both stages. What
remains for the stage 2 is the residual investment (1-) of the total with integration:
ICI (t=0) = . ITCI = 2 (1-) ISI Integrated infrastructure investment in stage 1
ICI (t=N) = (1-) ITCI = 2 (1-) (1-) ISI Integrated infrastructure investment in stage 2
The Present Value of this investment, VPICI, will be:
3.
ISI
i
VPI
i
ICI
ICIVPI
NCI
N
Nt
tCI
1
)1(
)1(2
1
)(
)0(
3) Decision criterion on anticipation in integrated infra:
Whenever the present value of the integrated option is greater than the present value of the option without
anticipation, anticipating the infra destroys project value (reduces NPV and IRR).
since ISI is common to both sides of the inequality, it disappears, leaving only the three variables we cited before
deducing the criterion for decision making: the anticipated capital in the integrated option (), the saving in CapEx total
in the integrated option () and the time interval between the two stages (N).
An important, and somewhat obscure, conclusion of this deduction is that the decision criterion is independent of the
size of the investment or plant capacity, and is applicable to mega-projects for billions or small projects.
Example:
As a quick example of applying this criterion, suppose a project for plant deployment in 2 stages of the same capacity.
CapEx design is US$ 800 million being US$ 160 million on the shared infrastructure to be deployed in the 1st stage,
leaving only US$ 8 million in the 2nd stage deployment. The option without anticipation would result in the
implementation of independent infrastructure at an estimated cost of US$ 13 million in each stage. So, the option of
anticipating the infrastructure presents savings of US$ 20 million in total CapEx. The anticipation without option reduces
US$ 30 million of CapEx for Stage 1 but increases by US$ 5 million in Stage 2.
Applying the criterion presented for = 0.077 and = 0.667, calculated by the reported values, and adopting an
opportunity cost i = 10% per year (typical), we find that N = 4 years is the interval between the implementation of 2
stages that equals the present values of the two options. Conclusion:
If N < 4 years, the option to anticipate the infra common to both stages is the one that reduces the VPI,
therefore, maximizes the NPV and IRR.
valoragreganãoAntecipar
1
)1(
)1(2
1
1
1
NN
CISI
ii
VPIVPI
Anticipate does not add value
4. If N> 4 years, it is best left to expand the infra at the time of the implementation of stage 2, because the
profitability of the capital not immobilized in the anticipation of the infra surpasses the economy that would be
obtained with the anticipation of the infra.
i = 10%
ALPHA = 0.077
BETA = 0.667
N
Without
Integration With integration
1+1/(1+i)N 2(1-)[+(1-)/(1+i)N
]
1 1,91 1,79
2 1,83 1,74
3 1,75 1,69
4 1,68 1,65
5 1,62 1,61
6 1,56 1,58
7 1,51 1,55
8 1,47 1,52
9 1,42 1,49
10 1,39 1,47
It is important to note that the time to when the best decision is by anticipating the scope of the next stage is very
sensitive to the relationship between the volume of capital anticipated and the savings that will be obtained with it.