Academic literature on the topic 'Discount Cash Flow- Rate of Return'
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Journal articles on the topic "Discount Cash Flow- Rate of Return"
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Kaczmarzyk, Jan. "Should One Assume the Discount Rate to Be One of the Risk Factors?" Financial Sciences 28, no. 2 (2023): 1–10. http://dx.doi.org/10.15611/fins.2023.2.01.
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The Monte Carlo simulation is the ultimate solution for considering nearly all possible scenarios in presumably any discounted cash flow valuation. This paper argues that a discount rate expresses an investor’s current requirement and should be respectively perceived as a parameter only. The consequences of qualifying a required rate of return (a discount rate) as a risk factor in a discounted cash flow valuation are described in the paper using a free cash flow financial model of an asset being a hypothetical publicly traded enterprise. The case study is a discounted cash flow valuation using the Monte Carlo simulation for risk analysis. The various sets of assumptions are considered to explain the consequences of qualifying a required rate of return in a discounted cash flow model as a risk factor. As indicated in the paper, the discount rate as an additional risk factor with an attributed probability distribution increases the volatility of a risk variable, then the distribution of a risk variable becomes more flattened. In previous studies, some authors indicated that a discount rate could be considered a risk factor in the Monte Carlo simulation (Krysiak 2000; Damodaran 2018).
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Botshekan, Mahmoud, Roman Kraeussl, and Andre Lucas. "Cash Flow and Discount Rate Risk in Up and Down Markets: What Is Actually Priced?" Journal of Financial and Quantitative Analysis 47, no. 6 (2012): 1279–301. http://dx.doi.org/10.1017/s0022109012000567.
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AbstractWe test whether asymmetric preferences for losses versus gains affect the prices of cash flow versus discount rate risk. We construct a return decomposition distinguishing cash flow and discount rate betas in up and down markets. Using U.S. data, we find that downside cash flow and discount rate betas carry the largest premia. Downside cash flow risk is priced consistently across different samples, periods, and return decomposition methods. It is the only component of beta with significant out-of-sample predictive ability. Downside cash flow premia mainly occur for small stocks, while large stocks are compensated for symmetric cash-flow-related risk.
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Garrett, Ian, and Richard Priestley. "Dividend Growth, Cash Flow, and Discount Rate News." Journal of Financial and Quantitative Analysis 47, no. 5 (2012): 1003–28. http://dx.doi.org/10.1017/s0022109012000427.
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AbstractUsing a new variable based on a model of dividend smoothing, we find that dividend growth is highly predictable and that cash flow news contributes importantly to return variability. Cash flow betas derived from this predictability are central to explaining the size effect in the cross section of returns. However, they do not explain the value effect; this is explained by noise betas. We also find that the relative importance of cash flow news in explaining recent stock price run-ups and subsequent declines increases when cash flow news is estimated directly.
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Jaunzeme, Justine Sophia. "Combining Environmental and Spatial Discount Rates for Valuation of Assets According to International Financial Reporting Standards." Economics and Culture 13, no. 1 (2016): 14–20. http://dx.doi.org/10.1515/jec-2016-0002.
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Abstract Application of discount rate in finance and accounting is founded on the concept of time value of money. Discounted cash flow model is widely used for asset valuation under the International Financial Reporting Standards (in abbreviation, IFRS). The discount rate applied in valuation models normally is the best rate of return that investors would earn alternative investments. With emergence of ecological economics as a separate branch of economics, the concept of ecological (or in other words, environmental discount rate) has been elaborated. Muller (2013) in his paper ‘The Discounting Confusion: an Ecological Economics Perspective’, argues that traditional discounting can undermine long-term sustainability of the economy. In his work, Frank G. Muller considered adjusting the traditional discount rate in order to arrive at an environmental discount rate, which would help to ensure the sustainability of the economy. Hannon (2001) and Perrings (2001) in their paper ‘An Introduction to Spatial Discounting’ consider another variation of the discount rate - spatial discount rate. Spatial discount rate represents the rate at which the diffusion of environmental effects of economic activities is discounted over space. By February 2016, neither the application of environmental nor spatial discount rates under IFRS has been considered. The purpose of this paper is to analyse the implications that environmental and spatial discounting would have for the application of discounted cash flow model according to IFRS. The research methods applied are methods of economic analysis and synthesis.
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Kalev, Petko S., Konark Saxena, and Leon Zolotoy. "Coskewness Risk Decomposition, Covariation Risk, and Intertemporal Asset Pricing." Journal of Financial and Quantitative Analysis 54, no. 1 (2018): 335–68. http://dx.doi.org/10.1017/s0022109018000637.
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We develop an intertemporal asset pricing model where cash-flow news, discount-rate news, and their second moments are priced by the market. This model generalizes the market-return decomposition framework, showing that intertemporal considerations imply a decomposition of squared market returns (coskewness risk). Our model accounts for 68% of the return variation across portfolios sorted by size, book-to-market ratio, momentum, investment, and profitability for a modern U.S. sample period. Further, our findings highlight the importance of covariation risk, that is, the risk of simultaneous unfavorable shocks to cash flows and discount rates, in understanding equity risk premia.
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Rasoul Foroughfard. "Predictibility of Returns with Buyback Cash Flows." Asian Academy of Management Journal of Accounting and Finance 20, no. 2 (2024): 1–28. https://doi.org/10.21315/aamjaf2024.20.2.1.
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This article re-evaluates return and cash flow predictability, extending beyond dividends to include repurchases and issuances cash flows. Employing total distribution in the Campbell-Schiller decomposition, I examine how prices respond to discount rate and cash flow growth changes. Contrary to conventional wisdom, the results indicate that while dividend yield predicts returns, distribution yield, encompassing all distributions, emerges as a more effective predictor of future cash flows. This challenge established literature, emphasising the significance of considering all cash flow components in asset pricing analyses.
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Saługa, Piotr W., Katarzyna Szczepańska-Woszczyna, Radosław Miśkiewicz, and Mateusz Chłąd. "Cost of Equity of Coal-Fired Power Generation Projects in Poland: Its Importance for the Management of Decision-Making Process." Energies 13, no. 18 (2020): 4833. http://dx.doi.org/10.3390/en13184833.
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Our knowledge of discount rates plays an important role both in the discounted cash flow decision-making process and in the later phases of a project’s lifetime. It is useful than both for management and cash-flow monitoring purposes at operating stages. Investors putting money into power generation projects expect an appropriate rate of return to compensate them for a minimum acceptable real return available in the market (risk-free rate of interest) and the project’s specific risk. Due to its essential nature in the financial and economic evaluation of projects (it is the only parameter that reflects the risk), it is reasonable to assume that investors would also be interested in constituent components of that indicator. The discount rate is one parameter in the discounted cash flow analysis that takes into account the risk of a venture. Further, the previous research in this area has focused mainly on the dimension of this variable, and the structure of this parameter has not been dealt with any other studies. The proposed idea of this study met the expectations of the industry—it aimed to present a typical project implemented in the energy industry, a relatively simple methodology that allowed estimating the components within the cost of equity capital of the enterprise. In the power generation sector, one can find various types of discount rates—assessed for multiple technologies, at different development stages, and expressed differently. Owing to the know-how and decades-long experience, coal-fired power projects’ remarks may be a good benchmark for alternative low carbon technologies. That is why, in this work, a discount rate for valuing investment in new coal-fired power projects was evaluated. This assessment was made on the “bare-bones” assumption, meaning evaluations at 100% equity, after-tax, in constant (real) currency units. The analysis of the discount rate structure was performed by applying the procedure of the classical sensitivity analysis having the accuracy of key input parameters. Finally, the risk factors within the risk-adjusted discount rate were calculated. The obtained results showed the importance of individual risk factors within the risk-adjusted discount rate used in coal energy projects, which would enable a more pragmatic approach to controlling this parameter by decision-makers and understanding the risk.
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Kharisma dwi novianti, Mochamad Reza Adiyanto, Bambang Sudarsono, and Eni Sri Rahayuningsih. "Feasibility of Halal-Certified Slaughterhouse Business in Financial Aspects." Maro: Jurnal Ekonomi Syariah dan Bisnis 6, no. 2 (2023): 322–31. http://dx.doi.org/10.31949/maro.v6i2.7250.
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penelitian ini bertujuan untuk mengetahui kelayakan usaha Rumah Potong Hewan ditinjau dari aspek keuangan. Objek yang diambil dari penelitian ini adalah Rumah Potong Hewan Krian Kabupaten Sidoarjo. Penelitian ini menggunakan metode kuantitatif dengan pengambilan sampel purposive sampling. Data yang diperoleh dari penelitian ini adalah data primer wawancara dengan kepala Rumah Potong Hewan Krian secara langsung. Analisis ini menggunakan alat analisis kelayakan investasi yaitu Net Present Value, Internal Rate of Return, Average Rate of Return, Break Event Point, Payback Period, Profitability Index, Discounted Cash Flow, dan Shutdown Point. Perhitungan yang dilakukan memperoleh hasil Net Present Value bernilai positif sebesar Rp 13.269.171 dan dinyatakan investasi layak, hasil Internal Rate of Return sebesar 15,51% dikatakan layak karena lebih besar dari Discount Rate, Average Rate of Return sebesar 130% dikatakan layak karena lebih dari 100%, Profitability Index menghasilkan perhitungan sebesar 1,09 dinyatakan layak karena lebih dari 1, Break Event Point pada pendapatan Rp 1.374.480.000 pertahunnya dengan payback period 1 tahun 6 bulan 15 hari. Perhitungan Discounted Cash Flow sebesar Rp 165.350.263 dan hasil analisis Shutdown Point pada pendapatan -Rp 22.761.205.167.
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Loebiantoro, Ika Yanuarti, and Jeunifer Nia Listiawan. "Valuation of Start-Up Company Using Real and Financial Assets Rate of Return." HOLISTICA – Journal of Business and Public Administration 11, no. 3 (2020): 120–32. http://dx.doi.org/10.2478/hjbpa-2020-0035.
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AbstractThe objective of this research is to analyse and describe the valuation of start-up company using the Discounted Cash Flow Analysis. There are several combination of discount rates, including combination of beta, risk free rate and market return. There are several market returns applied in the calculation of the discount rate, such as gold price, crude oil, property price index and IDX composite. The object of research is PT. XYZ, which is a start-up company engaged in the field of software (System & Mobile Application). The results showed that PT. XYZ is a start-up that has a systematic risk (Beta) of 5.1 point, which is lower than the average beta of hi-tech start-up companies. The fair value of PT. XYZ is Rp 3,729,416,128,911. Using a confidence level of 95%, the deviation of company’s value is between Rp102,726,286,407 and Rp7,356,105,971,415. It is concluded that valuing the start-up using real and financial asset return as a benchmark will provide high fair value. The reason is the return in those assets are lower because of lower risk. The lower rate of return will make the value of the start-up company higher. Therefore, investors will request the start-up company to provide higher value.
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Wu, Ming. "Momentum Returns in the Permanent Cash-flow News, Temporary Cash-flow News, and Discount-rate News States." Korean Data Analysis Society 25, no. 2 (2023): 629–38. http://dx.doi.org/10.37727/jkdas.2023.25.2.629.
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In this paper, unexpected market excess returns are decomposed into permanent cash-flow news, temporary cash-flow news, and discount-rate news by using a log-linear SVAR model, and the profitability of momentum strategies is analyzed under these news states. The empirical results are as follow. Frist, Momentum returns exist in the US stock market. Second, momentum profitability exists under both permanent and temporary cash-flow news states. This supports the results of Celiker et al. (2016) that momentum profitability exists in the US stock market under cash flow news states. Third, the momentum effect is strong even under the discount-rate news. Finally, Momentum profitability is stronger when the overall market is in an up market. In other words, when the market is up, investors tend to be overconfident, which creates momentums. This paper can analyze which factors play an important role in determining momentum returns by estimating permanent and temporary cash-flow news and discount-rate news by using the developed news decomposition method.
Dissertations / Theses on the topic "Discount Cash Flow- Rate of Return"
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Andronoudis, Dimos. "Essays on risk, stock return volatility and R&D intensity." Thesis, University of Exeter, 2015. http://hdl.handle.net/10871/21278.
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This thesis consists of three empirical essays studying the capital market implications of the accounting for R&D costs. The first empirical study (Chapter 2) re-visits the debate over the positive R&D-returns relation. The second empirical study (Chapter 3) examines the risk relevance of current R&D accounting. The third empirical study (Chapter 4) explores the joint impact of R&D intensity and competition on the relative relevance of the idiosyncratic part of earnings. Prior research argues that the positive relation between current R&D activity and future returns is evidence of mispricing, a compensation for risk inherent in R&D or a transformation of the value/growth anomaly. The first empirical study contributes to this debate by taking into account the link between R&D activity, equity duration and systematic risk. This link motivates us to employ Campbell and Vuolteenaho (2004)'s intertemporal asset pricing model (ICAPM) which accommodates stochastic discount rates and investors' intertemporal preferences. The results support a risk based explanation; R&D intensive firms are exposed to higher discount rate risk. Hedge portfolio strategies show that the mispricing explanations is not economically significant. The second empirical study contributes to prior research on the value relevance of financial reporting information on R&D, by proposing an alternative approach which relies on a return variance decomposition model. We find that R&D intensity has a significant influence on market participants' revisions of expectations regarding future discount rates (or, discount rate news) and future cash flows (or, cash flow news), thereby driving returns variance. We extend this investigation to assess the risk relevance of this information by means of its influence on the sensitivity of cash flow and discount rate news to the market news. Our findings suggest R&D intensity is associated with significant variation in the sensitivity of cash flow news to the market news which implies that financial reporting information on R&D is risk relevant. Interestingly, we do not establish a similar pattern with respect to the sensitivity of discount news to the market news which may dismiss the impact of sentiment in stock returns of R&D intensive firms. The third empirical study examines the effect of financial reporting information on R&D to the value relevance of common and idiosyncratic earnings. More specifically, we investigate the value relevance of common and idiosyncratic earnings through an extension of the Vuolteenaho (2002) model which decomposes return variance into its discount rate, idiosyncratic and common cash flow news. We demonstrate that the relative importance of idiosyncratic over common cash flow news in explaining return variance increases with firm-level R&D intensity. Extending this analysis, we find that this relation varies with the level of R&D investment concentration in the industry. Those results indicate that the market perceives that more pronounced R&D activity leads to outcomes that enable the firm to differentiate itself from its rivals. However, our results also suggest that the market perceives that this relation depends upon the underlying economics of the industry where the firm operates.
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Šiklová, Aneta. "Hodnocení ekonomické efektivnosti podnikatelského záměru." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2017. http://www.nusl.cz/ntk/nusl-265283.
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This diplome thesisdeals with determining of investment project economic efficiency. Evaluated investment project is redevelopment of urban house into boarding house with restaurant and café. The project is analyzed both in terms of pre-investment phase and 6 years after completion or reconstruction. There is comparison of both analysis at the end of dissertation including optimal solution suggestion of current situation.
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Veselý, Jakub. "Zhodnocení ekonomické efektivnosti investičního záměru podniku." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2012. http://www.nusl.cz/ntk/nusl-223416.
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The main goal of my master thesis is evaluation an investment project of company on the base of dynamic methods of investment evaluation. Methods of evaluation are net present value, payoff period, gross investment, profitability index and internal rate of return.
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Colletta, Renato Dalla. "Cash flow and discount rate risk decomposition and ICAPM for the US and brazilian stock markets." reponame:Repositório Institucional do FGV, 2013. http://hdl.handle.net/10438/10566.
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Previous issue date: 2013-01-31<br>This work applies the intertemporal asset pricing model developed by Campbell (1993) and Campbell and Vuolteenaho (2004) to the Brazilian 2x3 Fama-French stock portfolios from January 2003 to April 2012 and to the US 5x5 Fama-French portfolios in dfferent time periods. The variables suggested by Campbell and Vuolteenaho (2004) to forecast US market excess returns from 1929 to 2001 were also good excess return predictors for the Brazilian market on the recent period, except the term structure yield spread. However, we found that an increase in the small stock value spread predicts a higher market excess return, which is not consistent with the intertemporal model explanation for the value premium. Moreover, using the residuals of the forecasting VAR to define the test portfolios’ cash flow and discount rate shock risk sensitivity, we found that the resulting intertemporal model explains little of the variance in the cross section of returns. For the US market, we conclude that the proposed variables’ ability to forecast market excess returns is not constant in time. Campbell and Vuolteenaho’s (2004) success in explaining the value premium for the US market in the 1963 to 2001 sub-sample is a result of the VAR specification in the full sample, since we show that none of the variables are statistically significant return predictors in this sub-sample.<br>Esse trabalho é uma aplicação do modelo intertemporal de apreçamento de ativos desenvolvido por Campbell (1993) e Campbell e Vuolteenaho (2004) para as carteiras de Fama-French 2x3 brasileiras no period de janeiro de 2003 a abril de 2012 e para as carteiras de Fama-French 5x5 americanas em diferentes períodos. As varíaveis sugeridas por Campbell e Vuolteenaho (2004) para prever os excessos de retorno do mercado acionário americano no period de 1929 a 2001 mostraram-se também bons preditores de excesso de retorno para o mercado brasileiro no período recente, com exceção da inclinação da estrutura a termo das taxas de juros. Entretanto, mostramos que um aumento no small stock value spread indica maior excesso de retorno no futuro, comportamento que não é coerente com a explicação para o prêmio de valor sugerida pelo modelo intertemporal. Ainda, utilizando os resíduos do VAR preditivo para definir o risco de choques de fluxo de caixa e de choques nas taxas de desconto das carteiras de teste, verificamos que o modelo intertemporal resultante não explica adequadamente os retornos observados. Para o mercado norte-americano, concluímos que a habilidade das variáveis propostas para explicar os excessos de retorno do mercado varia no tempo. O sucesso de Campbell e Vuolteenaho (2004) em explicar o prêmio de valor para o mercado norte-americano na amostra de 1963 a 2001 é resultado da especificação do VAR na amostra completa, pois mostramos que nenhuma das varíaveis é um preditor de retorno estatisticamente significante nessa sub-amostra.
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Bílková, Alice. "Posouzení ekonomické efektivnosti investičního projektu." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2016. http://www.nusl.cz/ntk/nusl-240007.
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The subject of this thesis is to assess the economic efficiency of the investment project. The theoretical part focuses on the basic definitions related to investment decisions on the investment project and the project life cycle, cash flows and their predictions and recommendations to set them correctly, methods useful for assessing the effectiveness of the investment project and the indicators presenting the financial stability and feasibility of the project as well as factors affecting the overall investment decision, and finally the possibility of financing of the investment projects in the private sector. In the practical part there are the theoretical findings applied in the real investment project. Specifically, there will be analyzed the characterized investment project and its possible alternatives and finally made the assessment of economic efficiency.
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John, Jaroslav. "Úspěšnost vybraných metod fundamentální analýzy na vzorku akcií." Master's thesis, Vysoká škola ekonomická v Praze, 2009. http://www.nusl.cz/ntk/nusl-18804.
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The diploma thesis deals with the effectiveness of chosen fundamental analysis valuation methods on a sample of stocks. The sample consists of stocks traded on the Prague Stock Exchange and on the New York Stock Exchange. The Czech part of the sample consists of stocks of ČEZ, Erste Group Bank, Komerční banka, Philip Morris ČR and Telefónica O2. The American part of the sample includes stocks of Coca Cola, General Electric, Intel, Southern Company and Bank of America. These stocks are valued by dividend discount models and cash-flow models stepwise to the end of the years 2005 and 2006. As regards the dividend models, the Gordon model, the three-stage model and the H-model are applied whereas within the cash-flow models the DCF equity method was chosen. The effectiveness of the valuation process was subsequently tested over the course of three years by comparing the particular stock returns and the returns of the market portfolio represented by market index. The evaluation of effectiveness is then done in terms of the absolute, the relative and the portfolio effectiveness.
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Tran, Vinh. "Differential Impact of Investor Sentiment on the Capital Asset Pricing Model and Discounted Cash Flows Model Estimates of the Rate of Return on Equity." ScholarWorks@UNO, 2019. https://scholarworks.uno.edu/honors_theses/131.
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Traditional asset pricing models such as Capital Asset Pricing Model (CAPM) and Discounted Cash Flow (DCF) have been used widely in academics and practice due to their simplicity and popularity. The CAPM is a prescriptive model that describes the relationship between a stock’s required return and risk relative to the movements in the market, while the DCF is a descriptive model that measures the realized rate of return on a stock based on the market price of the stock, which in turn incorporates investor perceptions about the stock and the market. In an ideal, efficient market where investors behave rationally, we should not see much of a difference between stock returns estimated from these two models. However, because investor perceptions affect the DCF estimate of returns, changes in investor confidence without accompanying changes in firm risk can affect the DCF estimate without changing the CAPM estimate. High growth firm returns are more likely to incorporate changes in investor perception because more of their value is generated from realization of future growth opportunities. In this research, I study whether investor sentiment affects the DCF estimate of stock return more than the CAPM estimate, and whether this impact is more pronounced for high growth firms. I find results consistent with this hypothesis. I find that investor sentiment causes a divergence between the CAPM and DCF estimates of stock returns, and this divergence is higher for high growth firms compared to low growth firms. My findings suggest that high growth firm stock prices are more prone to distortions due to hype or investor pessimism.
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Nohava, Petr. "Hodnocení ekonomické efektivnosti podnikatelského projektu." Master's thesis, Vysoké učení technické v Brně. Fakulta stavební, 2017. http://www.nusl.cz/ntk/nusl-265589.
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This thesis deals with the determination of economic efficiency of business project, whose subject is the reconstruction of outbuildings at the hospital. The theoretical part is devoted to the business plan and its affiliates. There are also characterized by cash flows, the discount rate. The practical part describes the chosen project, determining cash flows, the assessment of economic efficiency and sensitivity to potential risks.
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Jankauskaitė, Giedrė. "AB "Pieno žvaigždės" vertės nustatymas." Bachelor's thesis, Lithuanian Academic Libraries Network (LABT), 2009. http://vddb.library.lt/obj/LT-eLABa-0001:E.02~2009~D_20090729_135229-03481.
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Darbe analizuojama AB „Pieno žvaigždės“ įmonės vertė. Nagrinėjama problema – ar įmonės akcijų rinkos kaina atitinka tikrąją įmonės vertę. Darbe atlikta pagrindinių vertės nustatymo metodų palyginamoji analizė. AB „Pieno žvaigždės“ vertes nustatymui pasirinkti du metodai: diskontuotų pinigų srautų, tenkančių įmonei ir palyginamųjų rodiklių. Diskontuotų pinigų srautų metodu nustatyta akcijos kaina - 3,50 lito. Akcijos rinkos kaina – 2,10 lito (2009 m. gegužės mėn). Tai parodo, kad įmonės akcijos yra nepakankamai įvertinamos rinkoje. Palyginamieji rodikliai lyginti su panašiomis dydžiu pieno perdirbimo įmonėmis užsienyje. Palyginamųjų rodiklių metodu apskaičiuota apytikslė akcijos vertė – 3,51 lito. Palyginamųjų rodiklių analizė patvirtina, kad įmonės akcijos yra nepakankamai įvertinamos. Atsižvelgiant į tyrimo rezultatus, rekomenduojama pirkti AB „Pieno žvaigždės“ akcijas.<br>This paper studies the value of JSC company „Pieno žvaigždės“. The main question addressed is: does company’s market share price is equal to the true value of the share. This paper analyses main valuation methods. For valuation of JSC “Pieno žvaigždės” share discounted cash flow to the firm and relative valuation approaches are chosen. Price calculated by the method of discounted cash flow to the firm - 3,50 litas. Market value of the share – 2,10 litas (as of May 2009). The findings show that shares of the company are undervalued in the market. Relative valuation ratios are compared to dairy companies abroad which are similar by size. Price calculated by relative valuation method – 3,51 litas. Relative valuation method proves that shares of the company are undervalued in the market. According to the findings of the paper it is recommended to acquire shares of JSC “Pieno žvaigždės”.
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Balga, František. "Ekonomická efektivnost kogenerační jednotky." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2011. http://www.nusl.cz/ntk/nusl-223088.
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This master thesis intents on analysing of economic efficiency of the investment project. Theoretical part of the thesis describes particular periods of the investment decision, what compromise a definition of more types of investments, investment projects and their classification. At the practical part of this thesis is applied the theoretical knowledge to evaluation of the planned investment, then is analysed the most profitable of the evaluated alternates and the last step is to propound next measure for the succesful realization of the project.
Books on the topic "Discount Cash Flow- Rate of Return"
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Lamont, Owen A. The diversification discount: Cash flows vs. returns. National Bureau of Economic Research, 1999.
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Hecht, Peter. Explaining returns with cash-flow proxies. National Bureau of Economic Research, 2005.
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Ljungqvist, Alexander. The cash flow, return and risk characterstics of private equity. National Bureau of Economic Research, 2003.
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Hansen, Lars Peter. Consumption strikes back?: Measuring long-run risk. National Bureau of Economic Research, 2005.
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Ammer, John. Cash flows and discount rates, industry and country effects, and co-movement in stock returns. Federal Reserve Board, 2004.
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Vuolteenaho, Tuomo. What drives firm-level stock returns? National Bureau of Economic Research, 2001.
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Priest, William W., John Keefe, Steven D. Bleiberg, and Michael A. Welhoelter. Winning at Active Management: The Essential Roles of Culture, Philosophy, and Technology. Wiley & Sons, Incorporated, John, 2016.
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Priest, William W., John Keefe, Steven D. Bleiberg, and Michael A. Welhoelter. Winning at Active Management: The Essential Roles of Culture, Philosophy, and Technology. Wiley & Sons, Incorporated, John, 2016.
Find full textBook chapters on the topic "Discount Cash Flow- Rate of Return"
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Myers, Stewart C., and Richard A. Cohn. "A Discounted Cash Flow Approach to Property-Liability Insurance Rate Regulation." In Fair Rate of Return in Property-Liability Insurance. Springer Netherlands, 1987. http://dx.doi.org/10.1007/978-94-015-7753-3_3.
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Abdel-Aal, Hussein K. "Discounted Cash Flow Rate of Return (D.C.F.R.) and Present Value Index (P.V.I.)." In Economic Analysis of Oil and Gas Engineering Operations. CRC Press, 2021. http://dx.doi.org/10.1201/9781003137696-7.
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Schoenmaker, Dirk, and Willem Schramade. "Cost of Capital." In Springer Texts in Business and Economics. Springer International Publishing, 2023. http://dx.doi.org/10.1007/978-3-031-35009-2_13.
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AbstractA company’s value is determined not just by its expected cash flows, but also by its cost of capital, which we explore in this chapter. We start with the cost of financial capital rFV, which is the required minimum return on financial capital that is used in investment decisions. Subsequently, we consider the impact of S (social) and E (environmental) risks on the cost of financial capital. That is, to what extent do companies incur additional (or reduced) financial risk from their S and E exposures? We then address the cost of social capital rSV and the cost of environmental capital rEV in their own right. These tend to be much lower than a company’s cost of financial capital. The flip side is that the present value of assets and liabilities on E and S tends to be quite high, as discounting with a low discount rate reduces the present value of underlying value flows in a limited way. Finally, we put rFV, rSV, and rEV together to obtain the cost of integrated capital, rIV, which is the return on integrated assets that is demanded by the company’s stakeholders on aggregate. Interestingly, rIV gives an indication of the overall risk of the company, which can differ substantially from the risk picture that emerges from a purely financial perspective, even if that financial perspective is taken on an ESG integrated basis.
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Schoenmaker, Dirk, and Willem Schramade. "Investment Decision Rules." In Springer Texts in Business and Economics. Springer International Publishing, 2023. http://dx.doi.org/10.1007/978-3-031-35009-2_6.
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AbstractWhen making investment decisions, companies need to be able to compare various investment opportunities. Which ones offer the best value? The first sections of this chapter describe how companies can make such comparisons on a purely financial basis, using the basic investment decision rules of payback period; internal rate of return (IRR); discounted cash flow (DCF); or net present value (NPV) to calculate financial value (FV). We then dive deeper in the calculation of social value (SV) and environmental value (EV). Even with these values known, the big question remains: how to balance them? What decision rules should be followed? We present three approaches to combining NPV with social (S) and environmental (E) factors: (1) the constrained PV (with S & E as a budget); (2) the expanded PV (with SV & EV in monetary values); and (3) the integrated PV (with SV & EV explicitly balanced). In all three approaches F, S, and E all weigh in and can be prioritised—ideally informed by the company’s purpose and value creation profile.
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Chen, James Ming. "Beta’s Cash Flow and Discount Rate Components." In Econophysics and Capital Asset Pricing. Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-63465-4_9.
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Harvey, Adam. "19. Introduction; The Time Value of Money; The Annuity Equation; Unit Energy Cost and Net Income; Net Present Value: NPV (r%); Internal Rate of Return (IRR); Simple and Discounted Payback Periods; Bank Loans and Interest; Cash Flow Analysis." In Micro-Hydro Design Manual. Practical Action Publishing, 1993. http://dx.doi.org/10.3362/9781780445472.019.
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Umesh Patidar, Gaurang, and Rishab Rajesh Agrawal. "ADVANCED FINANCIAL MODELING." In The Three Pillars of Business: A Guide to Integrated Marketing, Finance & HR Practices. Iterative International Publishers, Selfypage Developers Pvt Ltd, 2024. https://doi.org/10.58532/nbennurtpch12.
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Advanced financial modelling is a technique and methodology which is used to analyse and predict and forecast the performance of company manageries and also for decision making. This approach integrates financial quantitative theories and method to provide the comprehensive understanding to show the companies financial position in the market key components includes. · Discounted cash flow DCF analysis. Discounted rate is the rate of return used to discount future cash flow back to the present value. This rate is offend a companies weight average cost of capital w a c c it reflex the risk which are occurs with the cash flow statements of the company. · Comparables analysis. Comparable and company comparative analysis involves valuing of a company by comparing it with another companies as a same industry in the same sector of field. · Precedent transactions. Precedent transaction or comparable transaction involves the valuation of company based on the price of the other companies in the same market or the same field of the past transactions. · Sensitivity analysis. Sensitivity analysis is the technique or the process to use the valuation how the change of assumptions and input or outcomes of financial models are done to understand the robustness of influential variable that can impact result of the models. · Monte Carlo simulation. Monte Carlo civilization an advance modelling technique that use statical samples and tools to financial outcomes by simulating the numerous random inputs providing probability inside to the risk and decision making.
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Gollier, Christian. "The Weitzman Argument." In Pricing the Planet's Future. Princeton University Press, 2012. http://dx.doi.org/10.23943/princeton/9780691148762.003.0007.
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This chapter examines a model in which the exogeneous rate of return of capital is constant but random. Safe investment projects must be evaluated and implemented before this uncertainty can be fully revealed, i.e., before knowing the opportunity cost of capital. A simple rule of thumb in this context would be to compute the net present value (NPV) for each possible discount rate, and to implement the project if the expected NPV is positive. If the evaluator uses this approach, this is as if one would discount cash flows at a rate that is decreasing with maturity. This approach is implicitly based on the assumptions that the stakeholders are risk-neutral and transfer the net benefits of the project to an increase in immediate consumption. Opposite results prevail if one assumes that the net benefit is consumed at the maturity of the project.
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Ibbotson, Roger G., Jeffrey J. Diermeier, and Laurence B. Siegel. "The Demand for Capital Market Returns: A New Equilibrium Theory." In The Equity Risk Premium Essays and Explorations. Oxford University PressNew York, NY, 2006. http://dx.doi.org/10.1093/oso/9780195148145.003.0008.
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Abstract The Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT) model price risk premia that are part of the expected return of an asset. Since they are equilibrium models and assume fair pricing, they are used as the discount rate applied to the expected cash flows from an asset, in determining the asset’s present value. But these models price only systematic risk, assuming investors could diversify away from nonmarket risks. If the natural holders of an asset would find it costly or difficult to diversify, nonsystematic risk could also be priced. Furthermore, many non-risk characteristics of an asset are likely to be priced. Those include taxation, lack of marketability, information costs, and so on. Frequently the non-risk characteristics are even more important than the risk characteristics of an asset. This article presents a demand and supply framework for examining a wide range of assets, including stocks and bonds, but also real estate, venture capital, private equity, and so on. There is no “formula” presented, but instead the framework presents how an investor would be relatively averse to various asset characteristics and how summing demand across all investors gives us the equilibrium price of each asset. The article labels this
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Sandim, André, Maria Emília Silva, Ana Cristina Gonçalves, Margarida Tomé, and Teresa Fidalgo Fonseca. "Management of Pinus pinaster Aiton for Wood and Resin Production: A Technical-Financial Feasibility Analysis." In Conifers - Recent Advances [Working Title]. IntechOpen, 2022. http://dx.doi.org/10.5772/intechopen.104855.
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Maritime Pine sector is an important agent for promoting economy and sustainable development in Portugal. Among the products explored in these forests are wood and resin. The objective of this work was to evaluate the technical and financial viability from the creation of three simulated exploration scenarios: Wood Exploration (W), Resin (R) and Wood + Resin (WR), for this it was defined a loss of 16% of wood volume in resined forest stands and created operational models that defined the costs, investments and revenues that made it possible to prepare cash flow for each scenario and apply the Internal Rate of Return (IRR) feasibility analysis indicators, Net Current Value (VAL), Net Profitability Index (NPI) and Discounted Pay Back (DPB). Scenario R presented the best indicators, however, with absolute values that were not attractive and that the W and WR scenario presented viability but with a DPB at 10 years of age. The loss of wood was not compensated by resin production. The indicators of the WR scenario fell short of those observed in scenario R. Increased market price of resin and scale gain can overcome wood loss and ensure added value in the joint exploration of wood and resin.
Conference papers on the topic "Discount Cash Flow- Rate of Return"
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Shafira, Tasya, Aryanti Virtanti Anas, and Rini Novrianti Sutardjo Tui. "Cash Flow Analysis of Nickel Mining Activities." In International Conference on Research in Engineering and Science Technology (IC-REST) 2023. Trans Tech Publications Ltd, 2025. https://doi.org/10.4028/p-d5iaqv.
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Indonesia ranks second in the world for nickel resources. The location of laterite resources in Indonesia is in the Eastern Region of Indonesia (KTI), especially in Sulawesi and small islands in the North Maluku and Southeast Sulawesi islands so that many mining companies are engaged in the nickel mining industry. Nickel mining activities require large capital and investment and have high risks. This study aims to analyze the economics of one pit in a nickel mining company in Sulawesi in terms of investment feasibility plan using the discounted cash flow method. The resulting investment criteria are net present value (NPV) of $114,448,962.84, internal rate of return (IRR) of 153%, and payback period (PBP) of 1 year and 3 months which indicates that mining activities are feasible.
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Yadav, R., Priyesh Srivastava, and Samir Saraswati. "Thermo-Economic Analysis of Combined Cycles." In International Joint Power Generation Conference collocated with TurboExpo 2003. ASMEDC, 2003. http://dx.doi.org/10.1115/ijpgc2003-40119.
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The paper presents a thermo-economic analysis of gas/steam combined cycle. The stated objective is achieved by optimizing thermo-economic parameters for simple combined cycle (large and medium range) and to apply this to economic model of these cycles. The economic parameters evaluated in the present study include discount cash flow rate of return (DCRR) and gross payout period (GPO), two terms commonly employed in engineering economic analysis. DCRR and GPO are calculated for various electric sale and fuel prices. It has been found that maximum value of DCRR and minimum value of GPO are found with large size plant.
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La¨uferts, Ulrike, Charlotte Halbe, and Aliki van Heek. "Value-Creating Investment Strategies to Manage Risk From Structural Market Uncertainties: Switching and Compound Options in (V)HTR Technologies." In Fourth International Topical Meeting on High Temperature Reactor Technology. ASMEDC, 2008. http://dx.doi.org/10.1115/htr2008-58157.
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To measure the value of a technology investment under uncertainty with standard techniques like net present value (NPV) or return on investment (ROI) will often uncover the difficulty to present convincing business case. Projected cash flows are inefficient or the discount rate chosen to compensate for the risk is so high, that it is disagreeable to the investor’s requirements. Decision making and feasibility studies have to look beyond traditional analysis to reveal the strategic value of a technology investment. Here, a Real Option Analysis (ROA) offers a powerful alternative to standard discounted cash-flow (DCF) methodology by risk-adjusting the cash flow along the decision path rather than risk adjusting the discount rate. Within the GEN IV initiative attention is brought not only towards better sustainability, but also to broader industrial application and improved financing. Especially the HTR design is full of strategic optionalities: The high temperature output facilitates penetration into other non-electricity energy markets like industrial process heat applications and the hydrogen market. The flexibility to switch output in markets with multi-source uncertainties reduces downside risk and creates an additional value of over 50% with regard to the Net Present Value without flexibility. The supplement value of deploying a modular (V)HTR design adds over 100% to the project value using real option evaluation tools. Focus of this paper was to quantify the strategic value that comes along a) with the modular design; a design that offers managerial flexibility adapting a step-by-step investment strategy to the actual market demand and b) with the option to switch between two modes of operation, namely electricity and hydrogen production. We will demonstrate that the effect of uncertain electricity prices can be dampened down with a modular HTR design. By using a real option approach, we view the project as a series of compound options — each option depending on the exercise of those that preceded it. At each end of the design phase, the viability will be reviewed conditional on the operating spread at each time step. We quantify the value of being able to wait with the investment into a next block until market conditions are favourable and to be able to abandon one block if market conditions are disapproving. To derive the intrinsic value of this multi block HTR design, it will be compared with a reference investment of a full commitment light water reactor without any managerial flexibility. In another case, we raise the question to what extent product output diversification is a suitable strategy to cope with long term market uncertainty in electricity price. What is the value of a multi-potent technology that is able to produce output for energy markets others than the electricity market? To investigate this, we concentrate on The Netherlands, a country with an intense industrial demand in electricity and hydrogen.
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King, Carey W., Gu¨rcan Gu¨len, Joseph Essandoh-Yeddu, and Susan Hovorka. "Economic Analysis of an Integrated Anthropogenic Carbon Dioxide Network for Capture and Enhanced Oil Recovery Along the Texas Gulf Coast." In ASME 2009 3rd International Conference on Energy Sustainability collocated with the Heat Transfer and InterPACK09 Conferences. ASMEDC, 2009. http://dx.doi.org/10.1115/es2009-90415.
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This paper explains the system economics of an example integrated network that uses anthropogenic CO2 from Texas Gulf Coast fossil power plants for enhanced oil recovery (EOR). These CO2 sources and sinks are connected via a pipeline network. A discounted cash flow model indicates that for all candidate oil fields that require less than an estimated $10/BBL in EOR capital expenditure, all three entities (CO2 capture, pipelines, and EOR operators) can have 20% internal rate of return at $55 per tonne of CO2 and $56 per barrel of oil. These results include no existing or future tax incentives, and there are some costs not yet included. However, a Monte Carlo analysis shows insight by indicating that the total system rate of return is most sensitive to oil production parameters. Oil price and estimated amount of recoverable oil are the most positively influential factors while the EOR capital cost is the most negatively sensitive factor. The capital costs of capture and CO2 price are less sensitive, both negatively affecting rate of return.
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Ooi, D. "Comparative analysis of the relative attractiveness of the current fiscal terms in the South East Asia region." In Indonesian Petroleum Association 44th Annual Convention and Exhibition. Indonesian Petroleum Association, 2021. http://dx.doi.org/10.29118/ipa21-bc-205.
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This paper aims to assess the relative competitiveness of the current fiscal terms in South East Asia in the context of changes proposed and implemented across the region. A discounted cash flow (DCF) analysis was carried out based on the generic fiscal terms of Brunei, Indonesia, Malaysia, Thailand, and Vietnam based on an offshore, shallow water development. Where applicable, a comparison will be made against the previous fiscal terms of the country. Analysis will focus on investor returns and from the host government perspective evaluating net present value (NPV), internal rate of return (IRR), and government take. The fiscal terms were also assessed on whether they are progressive or regressive and provide an equitable return to both investors and host governments. Indonesia, Thailand, and Malaysia have seen recent shifts in their fiscal terms with new terms introduced in 2017, 2018, and 2021, respectively. Indonesia saw the introduction of the Gross Split Production Sharing Contract (GS PSC), which based on this analysis does not appear to be an improvement on the previous Cost Recovery Production Sharing Contract (CR PSC). Thailand saw the introduction of a CR PSC which was applied to the two expired offshore, producing, blocks. Based on our analysis, the newly introduced fiscal terms for Malaysia appears to provide a significant improvement to the previous terms and is likely to encourage further investment. Governments and regulators will face greater pressure to provide further incentives and greater flexibility to attract investments in the face of maturing fields, marginal fields, challenging sour gas resources, and capital constraints resulting from and Environmental, Social, and Corporate Governance (ESG) pressures on oil and gas companies.
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Yu, J. P. "Simulation Approach in Risk-Weighted Cash Flow Rate of Return Determination." In SPE Annual Technical Conference and Exhibition. Society of Petroleum Engineers, 1986. http://dx.doi.org/10.2118/15557-ms.
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Meulengracht, C. S., J. A. Djupvik, and A. Barhate. "Development of the Mozambique Gas Industry - Will Onshore LNG or Floating LNG Production Facilities Most Likely Deliver Profitable Projects for the IOCs?" In ADIPEC. SPE, 2024. http://dx.doi.org/10.2118/222870-ms.
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Abstract Objective/Scope Since 2010 more than 100 Tcf of recoverable gas reserves have been discovered offshore Mozambique. Large gas discoveries that are distant from markets now have 2 different LNG development solutions. The first is the classical onshore LNG production facility and the second is the offshore floating LNG (FLNG) production facility, a comparatively new development solution. This paper examines both solutions for all fields being developed or planned with both deterministic and stochastic LNG price assumptions. Method/Procedure/Process The Rovuma basin now features the Coral South FLNG in production, and the Coral North FLNG and several onshore LNG production facilities are being planned. Gas production profiles and costs including DRILLEX, CAPEX and OPEX are determined for these projects with their foreseen development solutions. Then the same profiles are estimated for the alternative development solutions. Base case deterministic economic analysis is carried out with detailed after-tax cash flows for all projects using both development solutions. Sensitivity analyses allow for calculating tornado diagrams and break-even values. Where appropriate a portfolio analysis is performed to include the effect of being in tax positions with multiple fields. In addition, stochastic random-walk LNG price scenarios are applied for all projects, including alternative development solutions. NPVs are then plotted as cumulative density distributions to determine the probabilities of the projects being economical for the IOCs given the LNG price variation assumptions. Cumulative density distributions are also created for the Government Takes. Results/Observations/Conclusions The calculated cumulative density distributions are skewed S-shaped curves leading to the conclusion that NPVs are log-normally distributed. The most important result is that the probabilities for the projects delivering positive NPV given stochastic LNG price scenarios, and therefore providing a minimum return equal to the discount rate, can be determined and compared with other projects and project solutions. Cumulative density distributions for the Government Takes are also be determined. The strengths and weaknesses of stochastic analysis versus deterministic analysis are discussed. Novelty/Additive Information Pure deterministic analysis with sensitivities is excellent for analyzing the robustness of a project, however when supplemented by stochastic analysis deeper insights are achieved. The novelty of this paper is the application of real project data with two alternative development solutions and then applying stochastic random-walk prices to evaluate the probabilities of being economical. The LNG prices are the most uncertain aspect of an LNG development and have the greatest impact on the economics.
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Pejović, Biljana, Dragana Trifunović, and Aleksandra Živaljević. "CASH FLOW FORECASTING FOR INTERNATIONAL PROJECTS IN THE PROCESS OF CAPITAL BUDGETING DURING THE COVID-19." In Fourth International Scientific Conference ITEMA Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture. Association of Economists and Managers of the Balkans, Belgrade, Serbia, 2020. http://dx.doi.org/10.31410/itema.2020.129.
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By predicting cash flows in the capital budgeting procedure, the profitability of an investment at the international level is determined in advance. Although investing globally provides greater opportunities for earnings, cost reduction and business diversification, all risks posed by international business must be considered when choosing a discount rate. In addition to the risks inherent in cross-border business such as exchange rate risk, country risk, the risks caused by the pandemic crisis, which relate primarily to measures taken by states to protect the population by introducing quarantine, restricting the flow of people, goods and capital, as well as activities that are endangered by a pandemic, must be considered too. If all the risks that determine the discount rate are well assessed, the cash flow forecast will be more accurate.
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Lidyanto, D. I. "A Comparative Study of Using Risk Adjusted Discount Rate and Historical-Based Monte Carlo Simulation to Evaluate Risk/Uncertainty in Oil and Gas Investment." In Indonesian Petroleum Association 44th Annual Convention and Exhibition. Indonesian Petroleum Association, 2021. http://dx.doi.org/10.29118/ipa21-bc-1.
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This paper presents a comparative analysis of the use of two methods, Risk Adjusted Discount Rate (RADR) and Monte Carlo Simulation, in evaluating the risks and uncertainties in an oil and gas investment proposal. Basically, RADR method is the same as the usual discounted cash flow. But the discount rate already considers any risk/uncertainty that a project will face. Thus, some percentage, based on trusted publisher, will be added to the discount rate. While using monte carlo simulation, an economic model, with base discount rate, will be evaluated by creating hundreds of possible iterations that continually change the major economic assumption based on historical data such as production, capital expenditure, operating expenditure, oil and gas price. The purpose of this paper is to compare the use of two methods, RADR and Historical-Based Monte Carlo Simulation in evaluating risk/uncertainty in oil and gas investment proposal. There are four real oil and gas projects which will be evaluated: Project 1 (Gas Development Project), Project 2 (Shallow Water Development Project), Project 3 (Offshore Development Project), and Project 4 (EOR Development Project). The Net Present Value (NPV) of each project with those two methods will be evaluated and analyzed. The comparison study shows that NPV Calculation with Historical-Based Monte Carlo Simulation tend to have higher NPV. This is important to maintain the level of project attractiveness. Historical Based Monte Carlo Simulation method also shows the real risks and uncertainties because it is based on the historical data. Besides, this method gives real picture of what the project might face in the future instead of allowing static variables to be introduced into potential dynamic model. However, to make Historical-Based Monte Carlo Simulation robust, complete historical database is needed. While, Risk Adjusted Discount Rate method can simply be used by trusted publication.
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Antić, Ljilja, Bojana Novićević Čečević, and Jovana Milenović. "Measuring Company Performance Using the Integrated Indicator." In 6th International Scientific Conference – EMAN 2022 – Economics and Management: How to Cope With Disrupted Times. Association of Economists and Managers of the Balkans, Belgrade, Serbia, 2022. http://dx.doi.org/10.31410/eman.s.p.2022.71.
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When assessing the company’s financial position and performance, we most often use financial indicators such as net income, rate of return on assets, rate of return on equity, cash flow and the like. However, dynamic business conditions have brought the need to use an integrated (composite) indicator, especially for a comparative long-term analysis of several companies. The composite indicator consists of individual indicators (variables) and allows for a comprehensive assessment of performance in order to get a full picture of the company’s business that all stakeholders can understand. The application of this indicator is possible at the national and international levels. Therefore, this paper aims to point out how performance measurement using a composite indicator facilitates the assessment of business operations, but also investors’ decision-making.
Reports on the topic "Discount Cash Flow- Rate of Return"
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Leece, A., and C. Jiang. A preliminary techno-economic assessment of lithium extraction from flowback and produced water from unconventional shale and tight hydrocarbon operations in Western Canada. Natural Resources Canada/CMSS/Information Management, 2023. http://dx.doi.org/10.4095/331879.
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In the path towards decarbonization, rechargeable lithium-ion batteries are critical for the widespread adoption of electric vehicles and renewable energy storage systems. To meet the growing demand for this mineral, various sources of lithium are being explored. This study evaluated the technical and economic feasibility of direct lithium extraction (DLE) from flowback and produced waters (FPW) of the Duvernay shale reservoir development near Fox Creek, Alberta and the Montney tight reservoir development in Northeast British Columbia using ion-exchange sorbents. Results indicate that lithium extraction from FPW using DLE technology is a viable option, with fluid pH, temperature, total suspended solids, and organic carbon affecting extraction efficiencies. In the assessment of Duvernay-based FPW fluids processed at a selected centralized facility, approximately 93 tonnes of lithium carbonate, or 105 tonnes of lithium hydroxide monohydrate could be produced annually, based on an average lithium content of 45.1 mg/L and a capacity of approximately 475,000 m3 per year. A discounted cash flow analysis determined the after-tax and royalty internal rate of return of 22% in the production of lithium carbonate (Li2CO3), and 38% in the production of lithium hydroxide monohydrate (LiOH·H2O) from the Duvernay development area. Comparatively, in the assessment of Montney brine fluids processed at a modelled centralized facility, approximately 117 tonnes of lithium carbonate or 134 tonnes of lithium hydroxide monohydrate could be produced annually, based on an average lithium content of 57.7 mg/L and a capacity of approximately 475,000 m3 per year. A discounted cash flow analysis determined the after-tax and royalty internal rate of return of 29% in the production of lithium carbonate and 48% in the production of lithium hydroxide monohydrate from the Dawson Creek Montney development area. These findings demonstrate the economic feasibility of extracting and refining lithium into battery-grade products from a novel source based on forecasted commodity prices and the development of a domestic battery supply chain system. Further investigation of DLE technology, a strategic resource sampling and analysis program, and investigation into the minimum scale of lithium extraction development are recommended.