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.

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]

New approximation for free surface flow of groundwater: capillarity correction

An existing capillarity correction for free surface groundwater flow as modelled by the Boussinesq equation is re-investigated. Existing solutions, based on the shallow flow expansion, have considered only the zeroth-order approximation. Here, a second-order capillarity correction to tide-induced watertable fluctuations in a coastal aquifer adjacent to a sloping beach is derived. A new definition of the capillarity correction is proposed for small capillary fringes, and a simplified solution is derived. Comparisons of the two models show that the simplified model can be used in most cases. The significant effects of higher-order capillarity corrections on tidal fluctuations in a sloping beach are also demonstrated. (c) 2004 Elsevier Ltd. All rights reserved.

Agency problems and capital expenditure announcements

This article examines the market valuation of announcements of new capital expenditure. Prior research suggests that the firm's growth opportunities and cash flow position condition the market response. This study jointly examines the role of growth and cash flow, and the interaction between them. Using a new data set of Australian firms that avoids problems associated with expectations models, the results are remarkably strong and support a positive association between growth opportunities and the market valuation, in addition to supporting the role of free cash flow. The findings have implications for the relationship between general investment information and stock prices.

Engineering of needle-free physical methods to target epidermal cells for DNA vaccination

A challenge in epidermal DNA vaccination is the efficient and targeted delivery of polynucleotides to immunologically sensitive Langerhans cells. This paper investigates this particular challenge for physical delivery approaches. The skin immunology and material properties are examined in the context of the physical cell targeting requirements of the viable epidermis. Selected current physical cell targeting technologies engineered to meet these needs are examined: needle and syringe; diffusion patches; liquid jet injectors; microneedle arrays/patches; and biolistic particle injection. The operating methods and relative performance of these approaches are discussed, with a comment on potential future developments and technologies. (c) 2005 Elsevier Ltd. All rights reserved.

Steepness expansion for free surface flows in coastal aquifers

Free surface flow of groundwater in aquifers has been studied since the early 1960s. Previous investigations have been based on the Boussinesq equation, derived from the non-linear kinematic boundary condition. In fact, the Boussinesq equation is the zeroth-order equation in the shallow-water expansion. A key assumption in this expansion is that the mean thickness of the aquifer is small compared with a reference length, normally taken to be the linear decay length. In this study, we re-examine the expansion scheme for free surface groundwater flows, and propose a new expansion wherein the shallow-water assumption is replaced by a steepness assumption. A comparison with experimental data shows that the new model provides a better prediction of water table levels than the conventional shallow-water expansion. The applicable ranges of the two expansions are exhibited. (c) 2004 Elsevier B.V. All rights reserved.

Turbulence in Hydraulic Jumps: Experimental Measurements

A hydraulic jump is the transition from a supercritical open channel flow to a subcritical regime. It is characterised by a highly turbulent flow with macro-scale vortices, some kinetic energy dissipation and a bubbly two-phase flow structure. New air-water flow measurements were performed in hydraulic jump flows for a range of inflow Froude numbers. The experiments were conducted in a large-size facility using two types of phase-detection intrusive probes: i.e., single-tip and double-tip conductivity probes. These were complemented by some measurements of free-surface fluctuations using ultrasonic displacement meters. The present study was focused on the turbulence characteristics of hydraulic jumps with partially-developed inflow conditions. The void fraction measurements showed the presence of an advective diffusion shear layer in which the void fractions profiles matched closely an analytical solution of the advective diffusion equation for air bubbles. The present results highlighted some influence of the inflow Froude number onto the air bubble entrainment process. At the largest Froude numbers, the advected air bubbles were more thoroughly dispersed vertically, and larger amount of air bubbles were detected in the turbulent shear layer. In the air-water mixing layer, the maximum void fraction and bubble count rate data showed some longitudinal decay function in the flow direction. Such trends were previously reported in the literature. The measurements of interfacial velocity and turbulence level distributions provided new information on the turbulent velocity field in the highly-aerated shear region. The present data suggested some longitudinal decay of the turbulence intensity. The velocity profiles tended to follow a wall jet flow pattern. The air–water turbulent time and length scales were deduced from some auto- and cross-correlation analyses based upon the method of CHANSON (2006,2007). The results provided the integral turbulent time and length scales of the eddy structures advecting the air bubbles in the developing shear layer. The experimental data showed that the auto-correlation time scale Txx was larger than the transverse cross-correlation time scale Txz. The integral turbulence length scale Lxz was a function of the inflow conditions, of the streamwise position (x-x1)/d1 and vertical elevation y/d1. Herein the dimensionless integral turbulent length scale Lxz/d1 was closely related to the inflow depth: i.e., Lxz/d1 = 0.2 to 0.8, with Lxz increasing towards the free-surface. The free-surface fluctuations measurements showed large turbulent fluctuations that reflected the dynamic, unsteady structure of the hydraulic jumps. A linear relationship was found between the normalized maximum free-surface fluctuation and the inflow Froude number.

Two-dimensional approximation for tidal dynamics in coastal aquifers: Capillarity correction

Most previous investigations on tide-induced watertable fluctuations in coastal aquifers have been based on one-dimensional models that describe the processes in the cross-shore direction alone, assuming negligible along-shore variability. A recent study proposed a two-dimensional approximation for tide-induced watertable fluctuations that took into account coastline variations. Here, we further develop this approximation in two ways, by extending the approximation to second order and by taking into account capillary effects. Our results demonstrate that both effects can markedly influence watertable fluctuations. In particular, with the first-order approximation, the local damping rate of the tidal signal could be subject to sizable errors.

The crystal structure of free human hypoxanthineguanine phosphoribosyltransferase reveals extensive conformational plasticity throughout the catalytic cycle

Human hypoxanthine-guanine phosphoribosyltransferase (HGPRT) catalyses the synthesis of the purine nucleoside monophosphates, IMP and GMP, by the addition of a 6-oxopurine base, either hypoxanthine or guanine, to the 1-beta-position of 5-phospho-U-D-ribosyl-1-pyrophosphate (PRib-PP). The mechanism is sequential, with PRib-PP binding to the free enzyme prior to the base. After the covalent reaction, pyrophosphate is released followed by the nucleoside monophosphate. A number of snapshots of the structure of this enzyme along the reaction pathway have been captured. These include the structure in the presence of the inactive purine base analogue, 7-hydroxy [4,3-d] pyrazolo pyrimidine (HPP) and PRib-PP. Mg2+, and in complex with IMP or GMP. The third structure is that of the immucillinHP.Mg2+.PPi complex, a transition-state analogue. Here, the first crystal structure of free human HGPRT is reported to 1.9 angstrom resolution, showing that significant conformational changes have to occur for the substrate(s) to bind and for catalysis to proceed. Included in these changes are relative movement of subunits within the tetramer, rotation and extension of an active-site alpha-helix (D137-D153), reorientation of key active-site residues K68, D137 and K165, and the rearrangement of three active-site loops (100-128, 165-173 and 186-196). Toxoplasina gondii HGXPRT is the only other 6-oxopurine phosphoribosyltransferase structure solved in the absence of ligands. Comparison of this structure with human HGPRT reveals significant differences in the two active sites, including the structure of the flexible loop containing K68 (human) or K79 (T gondii). (c) 2005 Elsevier Ltd. All rights reserved.

Tetrahydrofolates are greatly stabilized by binding to bovine milk folate-binding protein

The dietary supply of folates and their measurement are both affected, potentially, by the instability of some folates. Labile folates appear to be stabilized by binding to folate-binding protein (FBP); this paper reports measurements of that stabilization. The degradation rates of the very labile tetrahydrofolate (H(4)folate) and moderately labile 5-methyltetrahydrofolate (5-CH(3)H(4)folate) were measured with the compounds free or bound to either soluble or immobilized bovine milk FBP. Complexation increased stability from 2- to > 1000-fold, depending on buffer and temperature conditions. H(4)folate at 4degreesC and pH 6.7 appeared to be quite stable for > 100 d when bound to soluble FBP but had a half-life of < 1 h when free. Stabilization of milk folates may be a role of FBP and would improve the bioavailability of milk folate to newborns and other consumers.

The NASCAR phenomenon: Auto racing sponsorships and shareholder wealth

This study presents the first analysis of the impact of NASCAR sponsorship announcements on the stock prices of sponsoring firms. The primary finding of the study-that NASCAR sponsorship announcements were accompanied by the largest increases in shareholder wealth ever recorded in the marketing literature in response to a voluntary marketing program-represents a striking and unambiguous stock market endorsement of the sponsorships. Indeed, the 24 sponsors analyzed in this study experienced mean increases in shareholder wealth of over $300 million dollars, net of all of the costs associated with the sponsorships. A multiple regression analysis of firm-specific stock price changes and select corporate and sponsorship attributes indicates that NASCAR sponsorships with more successful racing teams, corporate (as opposed to product or divisional) sponsorships, and sponsorships with direct ties to the consumer automotive industry are all positively correlated with perceived sponsorship success, while corporate cash flow per share (a well-known proxy for agency conflicts within the firm) is negatively related with shareholder approval.

Numerical evaluation of three dimensional effects in planar flow birefringence

The influence of three dimensional effects on isochromatic birefringence is evaluated for planar flows by means of numerical simulation. Two fluid models are investigated in channel and abrupt contraction geometries. In practice, the flows are confined by viewing windows, which alter the stresses along the optical path. The observed optical properties differ therefore from their counterpart in an ideal two-dimensional flow. To investigate the influence of these effects, the stress optical rule and the differential propagation Mueller matrix are used. The material parameters are selected so that a retardation of multiple orders is achieved, as is typical for highly birefringent melts. Errors due to three dimensional effects are mainly found on the symmetry plane, and increase significantly with the flow rate. Increasing the geometric aspect ratio improve the accuracy provided that the error on the retardation is less than one order. (C) 2004 Elsevier B.V. All rights reserved.