Present value of costs

About: Present value of costs is a research topic. Over the lifetime, 103 publications have been published within this topic receiving 2723 citations.

Quantifying urban forest structure, function, and value: the Chicago Urban Forest Climate Project

Abstract: This paper is a review of research in Chicago that linked analyses of vegetation structure with forest functions and values. During 1991, the regions trees removed an estimated 5575 metric tons of air pollutants, providing air cleansing worth 9.2 million. Each year they sequester an estimated 315 800 metric tons of carbon. Increasing tree cover 10% or planting about three trees per building lot saves annual heating and cooling costs by an estimated 50 to 90 per dwelling unit because of increased shade, lower summertime air temperatures, and reduced neighborhood wind speeds once the trees mature. The net present value of the services trees provide is estimated as 402 per planted tree. The present value of long-term benefits is more than twice the present value of costs.

Reconciling Value Estimates from the Discounted Cash Flow Value Model and the Residual Income Model

Abstract: In this paper we investigate why the discounted cash flow model and residual income model frequently give different value estimates. We identify three common errors in the implementation of the models and show that these errors affect the models in different ways, creating differences in the value estimates that each produces. Our estimates of the size and direction of these errors roughly reconciles the observed differences in value estimates from papers attempting to "horse-race" the models. We also argue that any such contest is ill-conceived; given the same set of forecasted financial statements all models derived from the basic dividend-discounting assumption should yield the same value estimate. We discuss why claims of the residual income model's superiority over the discounted cash flow model, both on empirical and theoretical grounds, are misstated.

Costs and cost-minimisation analysis.

Abstract: Whatever kind of economic evaluation you plan to undertake, the costs must be assessed. In health care these are first of all divided into costs borne by the NHS (like drugs), by patients and their families (like travel), and by the rest of society (like health education). Next the costs have to be valued in monetary terms; direct costs, like wages, pose little problem, but indirect costs (like time spent in hospital) have to have values imputed to them. And that is not all: costs must be further subdivided into average, marginal, and joint costs, which help decisions on how much of a service should be provided. Capital costs (investments in plant, buildings, and machinery) are also important, as are discounting and inflation. In this second article in the series Ray Robinson defines the types of costs, their measurement, and how they should be valued in monetary terms.