Introduction to Discounted Cash Flow Analysis and Financial Functions in Excel

The financial and economic analysis of investment projects is typically carried out using the technique of discounted cash flow (DCF) analysis. This module introduces concepts of discounting and DCF analysis for the derivation of project performance criteria such as net present value (NPV), internal rate of return (IRR) and benefit to cost (B/C) ratios. These concepts and criteria are introduced with respect to a simple example, for which calculations using MicroSoft Excel are demonstrated.

Gender, marital status, farm size and other factors influencing the extent of cash cropping in Kenya: A case study

This article examines the effects of commercialisation of agriculture on land use and work patterns by means of a case study in the Nyeri district in Kenya. The study uses cross sectional data collected from small-scale farmers in this district. We find that good quality land is allocated to non-food cash crops, which may lead to a reduction in non-cash food crops and expose some households to greater risks of possible famine. Also the proportion of land allocated to food crops declines as the farm size increases while the proportion of land allocated to non-food cash crops rises as the size of farm increases. Cash crops are also not bringing in as much revenue commensurate with the amount of land allocated to them. With growing commercialisation, women still work more hours than men. They not only work on non-cash food crops but also on cash crops including non-food cash crops. Evidence indicates that women living with husbands work longer hours than those married but living alone, and also longer than the unmarried women. Married women seem to lose their decision-making ability with growth of commercialisation, as husbands make most decisions to do with cash crops. Furthermore husbands appropriate family cash income. Husbands are less likely to use such income for the welfare of the family compared to wives due to different expenditure patterns. Married women in Kenya also have little or no power to change the way land is allocated between food and non-food cash crops. Due to deteriorating terms of trade for non-food cash crops, men have started cultivation of food cash crops with the potential of crowding out women. It is found that both the area of non-cash crops tends to rise with farm size but also the proportion of the farm area cash cropped rises in Central Kenya.

Marital status, farm size and other influences on the extent of cash cropping in Kenya: A household case study

This article examines the effects of marital status, farm size and other factors on the extent of cash cropping (and allocation of land use) by means of a case study in the Nyeri district in Kenya. It was found that married women are involved in the production of a relatively greater amount of output of cash crops than unmarried women since husbands prefer to have more land under cash crops than food crops. Farmers with better quality land allocate a high proportion of it to non-food cash crops, which may expose some households to greater risks of possible famine. The proportion of land allocated to food crops declines as the farm size increases while the proportion of land allocated to non-food cash crops rises as the size of farm increases. Age is also inversely associated with subsistence. Education, though inversely associated with subsistence farming does not appear to be statistically very significant as an influence on the composition of land use and composition of farm output. With growing commercialisation, married women work more hours than unmarried ones, working not only on non-cash food crops but also on non-food cash crops. Married women seem to lose their decision-making ability with growth of agricultural commercialisation, as husbands make most decisions to do with cash crops. Married women in Kenya also have little or no power to change the way land is allocated between food and non-food cash crops.

Reconciling value estimates from the discounted cash flow model and the residual income model

This paper examines why practitioners and researchers get different estimates of equity value when they use a discounted cash flow (CF) model versus a residual income (RI) model. Both models are derived from the same underlying assumption -- that price is the present value of expected future net dividends discounted at the cost of equity capital -- but in practice and in research they frequently yield different estimates. We argue that the research literature devoted to comparing the accuracy of these two models is misguided; properly implemented, both models yield identical valuations for all firms in all years. We identify how prior research has applied inconsistent assumptions to the two models and show how these seemingly small errors cause surprisingly large differences in the value estimates. [ABSTRACT FROM AUTHOR]

Cash, customers, and care: The experience and meaning of differential payment for high care places in aged care facilities

The introduction of new asset/income tested charges for high care residents was the 1997-98 Commonwealth government policy response to concerns about financing residential aged care. This in-depth study of residents, families, staff and managers in three aged care facilities explores issues of equity, access and empowerment arising when some residents pay more for the same level of care and amenity. The study reports little evidence of financial contributions affecting access to high care places and the delivery of care, the potential for differential access to amenities such as single rooms linked to the extra payments, and no evidence of a sense of empowerment linked to payment of the new charges. The complexity of current financial arrangements, access to appropriate financial advice at the time of entry, and the potential for an informal two tier system in relation to the allocation Of amenities are identified as developing policy issues.

Evidence for a global Wolbachia replacement in Drosophila melanogaster

Wolbachia are maternally inherited intracellular α-Proteobacteria found in numerous arthropod and filarial nematode species [1, 2 and 3]. They influence the biology of their hosts in many ways. In some cases, they act as obligate mutualists and are required for the normal development and reproduction of the host [4 and 5]. They are best known, however, for the various reproductive parasitism traits that they can generate in infected hosts. These include cytoplasmic incompatibility (CI) between individuals of different infection status, the parthenogenetic production of females, the selective killing of male embryos, and the feminization of genetic males [1 and 2]. Wolbachia infections of Drosophila melanogaster are extremely common in both wild populations and long-term laboratory stocks [6, 7 and 8]. Utilizing the newly completed genome sequence of Wolbachia pipientis wMel [9], we have identified a number of polymorphic markers that can be used to discriminate among five different Wolbachia variants within what was previously thought to be the single clonal infection of D. melanogaster. Analysis of long-term lab stocks together with wild-caught flies indicates that one of these variants has replaced the others globally within the last century. This is the first report of a global replacement of a Wolbachia strain in an insect host species. The sweep is at odds with current theory that cannot explain how Wolbachia can invade this host species given the observed cytoplasmic incompatibility characteristics of Wolbachia infections in D. melanogaster in the field [6].

Moneyless business exchange - Practitioners' attitudes to business-to-business barter in Australia

In recent years, domestic business-to-business barter has become institutionalized as an alternative marketing exchange system in Australia, and elsewhere. This article reports the findings of a survey of 164 members of Australia's largest trade exchange, Bartercard There are few, if any, published empirical studies on this topic. This study is exploratory. Most firms surveyed are small firms in the services sectors. Although Bartercard has an extensive membership, trading within the system is limited with most members trading less than once per week and with barter transactions contributing less than 5% of their annual gross sales. The main benefits of membership include new customers and increased sales and networking opportunities. The main limitations include the limited functionality of the trade dollar limited trading opportunities, and practical trading difficulties. In selling, there appears to be no differential between the cash and trade prices, whereas trade dollars are discounted in purchasing. Participants acknowledge that business-to-business barter will remain and grow regardless of cyclical macroeconomic changes. (C) 1998 Elsevier Science Inc.

An auction theoretical approach to fiscal wars

I examine a situation where a firm chooses to locate a new factory in one of several jurisdictions. The value of the factory may differ among jurisdictions and it depends on the private information held by each jurisdiction. Jurisdictions compete for the location of the new factory. This competition may take the form of expenditures already incurred on infrastructure, commitments to spend on infrastructure, tax incentives or even cash payments. The model combines two elements that are usually considered separately; competition is desirable because we want the factory to be located in the jurisdiction that values it the most, but competition in itself is wasteful. I show that the expected total amount paid to the firm under a large family of arrangements is the same. Moreover, I show that the ex-ante optimal mechanism that is, the mechanism that guarantees that the firm chooses the jurisdiction with the highest value for the factory, minimizes the total expected payment to the firm, and balances the budget in an ex-ante sense - can be implemented by running a standard auction and subsidizing participation.

Superior electric double layer capacitors using ordered mesoporous carbons

This paper reports for the first time superior electric double layer capacitive properties of ordered mesoporous carbon (OMCs) with varying ordered pore symmetries and mesopore structure. Compared to commercially used activated carbon electrode, Maxsorb, these OMC carbons have superior capacitive behavior, power output and high-frequency performance in EDLCs due to the unique structure of their mesopore network, which is more favorable for fast ionic transport than the pore networks in disordered microporous carbons. As evidenced by N-2 sorption, cyclic voltammetry and frequency response measurements, OMC carbons with large mesopores, and especially with 2-D pore symmetry, show superior capacitive behaviors (exhibiting a high capacitance of over 180 F/g even at very high sweep rate of 50 mV/s, as compared to much reduced capacitance of 73 F/g for Maxsorb at the same sweep rate). OMC carbons can provide much higher power density while still maintaining good energy density. OMC carbons demonstrate excellent high-frequency performances due to its higher surface area in pores larger than 3 nm. Such ordered mesoporous carbons (OMCs) offer a great potential in EDLC capacitors, particularly for applications where high power output and good high-frequency capacitive performances are required. (C) 2005 Elsevier Ltd. All rights reserved.

Spatial bias and temporal lag in tactile space perception

Constructing a veridical spatial map by touch poses at least two problems for a perceptual system. First, as the hand is moved through space, the locations of features may be displaced if there is an uncorrected lag between the moment the hand encounters a feature and the time that feature is encoded on a spatial map. Second, due to the sequential nature of the process, some form of memory, which itself may be subject to spatial distortions, is required for integration of spatial samples. We investigated these issues using a task involving active haptic exploration with a stylus swept back and forth in the horizontal plane at the wrist. Remembered locations of tactile targets were shifted towards the medial axis of the forearm, suggesting a central tendency in haptic spatial memory, while evidence for a displacement of perceived locations in the direction of sweep motion was consistent with processing delays.

Commercialisation of agriculture in Kenya: Case study of urban bias on food availability in farm households

This study investigates the effect of cash cropping on food availability and examines the determinants of the proportion of income allocated for food expenditures in the Nyeri district in Kenya. Using a Tobit model, the results suggest that in general food expenditure allocations suffer due to cash cropping in Kenya as the lump-sum income flows from this may be used for purchases other than food. Food expenditure also suffers when remittances are irregular. On the other hand, earnings from outside employment for married women living with husbands are positively associated with food expenditure allocations. Amounts of non-cash food output as well as ownership of livestock are negatively associated with food expenditure allocations. These findings indicate that lump sum income may not lead to improved welfare of women and children. Thus, there may be social reasons for increasing non-cash food production especially by women, instead of over emphasizing cash cropping as now seems to be so in public policy.

The relationship between commercial agriculture and food availability to Kenyan farm families: A case study

This article examines the effects of agricultural commercialization and other factors on per capita food availability by means of a case study in the Nyeri district in Kenya. It was found that cash cropping has a negative influence on per capita food availability in the male-headed households. This negative influence is not apparent in the female-headed households and in fact, per capita food availability rises with increased agricultural commercialization. Households of married women seem to suffer more in terms of reduced food availability than households headed by females. Husbands have control over cash income and therefore influence food purchases. They are less likely than females to use the cash for food purchases and tend to spend the cash on themselves, thus reducing food availability to family members. This suggests that in some patriarchal societies, caution should be displayed in encouraging cash cropping especially in male-headed households. Cash cropping under such circumstances is unwise from both a food availability and food security point of view because it can result in reduced crop diversification hence increasing the risks of income food deficits for families. Other factors found to have an influence on per capita food availability are employment of the women outside households, educational level of the women and the quality of land.

Field test of a model of migration of moths (Lepidoptera : Noctuidae) in inland Australia

A migration of Helicoverpa punctigera (Wallengren), Heliothis punctifera (Walker) and Agrotis munda Walker was tracked from Cameron Corner (29degrees00'S, 141degrees00'E) in inland Australia to the Wilcannia region, approximately 400 km to the south-east. A relatively isolated source population was located using a distribution model to predict winter breeding, and confirmed by surveys using sweep netting for larvae. When a synoptic weather pattern likely to produce suitable conditions for migration developed, moths were trapped in the source region. The next morning a simulation model of migration using wind-field data generated by a numerical weather-prediction model was run. Surveys using sweep netting for larvae, trapping and flush counts were then conducted in and around the predicted moth fallout area, approximately 400 km to the south-east. Pollen carried on the probosces of moths caught in this area was compared with that on moths caught in the source area. The survey data and pollen comparisons provided evidence that migration had occurred, and that the migration model gave accurate estimation of the fallout region. The ecological and economic implications of such migrations are discussed.