Capital budgeting is a required managerial tool. One duty of a financial manager is to choose investments with satisfactory cash flows and rates of return. Therefore, a financial manager must be able to decide whether an investment is worth undertaking and be able to choose intelligently between two or more alternatives. To do this, a sound procedure to evaluate, compare, and select projects is needed. This procedure is called capital budgeting.

[경영학] Capital Budgeting을 논함

This paper aims to present the combination of enterprise risk management (ERM) and value-based management as especially suitable methods for companies with a shareholder value imperative. Among its major benefits, these methods make the contribution of risk management for business decisions more effective.,Any possible inconsistencies between ERM, generating value because of imperfect capital markets and the CAPM to calculate cost of capital, which assumes perfect markets, must be avoided. Therefore, it is imperative that valuation methods used are based on risk analysis, and thus do not require perfect capital markets.,Value-based risk management requires the impact of changes in risk on enterprise value to be calculated and the aggregation of opportunities and risks related to planning to calculate total risk (using Monte Carlo simulation) and valuation techniques that reflect the effects changes in risk, on probability of default, cost of capital and enterprise value (and do not assume perfect capital markets). It is recommended that all relevant risks should be quantified and described using adequate probability distributions derived from the best information.,This approach can help to improve the use of risk analysis in decision-making by improving existing risk-management systems.,This extension of ERM is outlined to provide risk-adequate evaluation methods for business decisions, using Monte Carlo simulation and recently developed methods for risk–fair valuation with incomplete replication in combination with the probability of default. It is shown that quantification of all risk using available information should be accepted for the linking of risk analysis and business decisions.

Cost of capital and probability of default in value-based risk management

The significant failure rates observed in mergers and acquisitions (M&A) indicate structural deficiencies in business transactions. This paper identifies serious weaknesses in common valuation methods that play a key role in poor transaction practice. Common valuation methods are in particular discounted cash flow (DCF) methods. DCF methods are usually based on neo-classical theories that assume the existence of a perfect and complete capital market. As will be demonstrated, the underlying theoretical patchwork is contradictory and lacks utility. Therefore, utilizing DCF methods to value a business and deduce economic decisions from such a valuation is decision-making built on sand. Following a normative-deductive methodology, this paper seeks an alternative theoretical concept to build a business valuation theory on solid ground. Such an alternative is found in the Austrian School of thought. The resulting valuation concept, subjective business valuation theory, is based on the theory of marginal utility proposed by Gossen, which was rediscovered and refined by the scholars of the early Austrian School. Contrary to highly restrictive neo-classical valuation, subjective business valuation approaches reality and is therefore well-suited for practical implementation.

Business Valuation Inspired by the Austrian School

The last half a century of Foreign Aid disbursal to Sub-Sahara Africa had been dominated by the need to address the perennial problem of its effectiveness. This has provided to a great number of stakeholders a premise for dismissal of foreign aid to be an instrument for economic growth and poverty reduction as initially thought. Drawing from recent literature, a conceptual framework was designed to capture and investigate various contextual factors that would contribute or initiate particular characteristics of the donor-recipient relationship. From a perspective of aid recipients, this study assumes that a management approach to aid would provide an understanding of mismatches between donors and recipients as a possible reason for aid effectiveness standards being unsatisfactory to many. A qualitative case study of two idiosyncratic countries: Cameroon and Tanzania was conducted utilizing a retroductive analysis approach. To provide additional internal validation, a stakeholders? analysis and a business appraisal were also conducted. A number of explanatory mechanisms were constructed and answered positively the research preoccupation of identifying donor-recipient mismatches as well as showing that these mismatches affected to a very large extent the effective management of foreign aid.Further research is recommended chiefly in the donor-recipient relationship vis-�-vis foreign aid quality looking at the history, current and future international interactions. Also, researches in new and meaningful ways of assessing foreign aid impacts.

Aid effectiveness in Sub-Saharan Africa : an analysis of mismatches between donors and recipients

“A small business is not a little big business” (Welsh and White, 1981) – this also holds true for valuing small businesses. Such companies act in utmost imperfect markets, are generally unique and the forecast of their future profit is rather difficult. These characteristics impede the use of DCF and real option methods, as well as of multiples. Therefore, this paper presents the functional valuation theory as an alternative approach to valuation. Its partial and general models allow a better adaption to the characteristics of entrepreneurial businesses, especially when these models are combined with a Monte Carlo simulation.

Valuation of entrepreneurial businesses

After a brief overview of different company valuation theories, this paper presents the main functions (decision, arbitration, and argument or negotiation function) of company valuation according to the functional (i.e., purpose-oriented) theory. The main body of the paper focuses on the decision function and shows how the decision value can be derived as a subjective limit value that different economic agents assign to the company. Finally, the differences between the functional and the market value oriented theory of company valuation are discussed.

/pdf/fundamentals-of-functional-business-valuation-38z5iun888.pdf

Fundamentals of Functional Business Valuation

Unternehmensbewertung : Funktionen - Methoden - Grundsätze

Finanzanalyse und Finanzplanung

Das duale Rundfunksystem Die audiovisuellen Medienrechte Die allgemeinen Grundlagen der Bewertung Die medienrechtsspezifischen Grundlagen der Bewertung Die totalanalytische Bewertung audiovisueller Medienrechte Die partialanalytische Bewertung audiovisueller Medienrechte Die heuristische Bewertung audiovisueller Medienrechte

Medienrechtsbewertung : der Wert audiovisueller Medienrechte im dualen Rundfunksystem

https://www.econstor.eu/bitstream/10419/32336/1/590400584.pdf

Manfred Jürgen Matschke

Papers

Fundamentals of Functional Business Valuation

Unternehmensbewertung : Funktionen - Methoden - Grundsätze

Finanzanalyse und Finanzplanung

Medienrechtsbewertung : der Wert audiovisueller Medienrechte im dualen Rundfunksystem

Grundzüge der funktionalen Theorie der Unternehmensbewertung