Tax Cost of Investment Projects: the case of ICMS credits

This article discusses the impact on the profitability of firms under Complementary Law 102/2000 (which abrogated the Law 89/96 - Kandir Law) allowing the appropriation of ICMS credits, due to investment in fixed assets goods, at a ratio of 1/48 per month. The paper seeks to demonstrate how this new system - which resulted in the transformation of the ICMS as a value added tax (VAT) consumption-type to an income-type - leads to a loss of approximately 30% of the value of credits to be recovered and the effect it generates on the cost of investment and the profits for small, medium and large firms. From the methodological point of view, it is a descriptive and quantitative research, which proceeded in three stages. Initially, we have obtained estimated value of net sales and volume of investments, based on report Painel de Competitividade prepared by the Federacao das Indtustrias do Estado de Sao Paulo (Fiesp/Serasa). Based on this information, it was possible to obtain estimates of the factors of generation of debits and credits for ICMS, using the model Credit Control of Fixed Assets (CIAP). Finally, we have calculated three indicators: (i) present value of debt recovery/value of credits, (ii) present value of debt recovery / investment value, (iii) present value of debt recovery / sales profitability. We have conclude that the system introduced by Complementary Law 102/2000 implicates great opportunity cost for firms and that legislation should be reviewed from this perspective, aiming to ensure lower costs associated with investment projects.

Multicollinearity and financial constraint in investment decisions: a Bayesian generalized ridge regression

This paper addresses the investment decisions considering the presence of financial constraints of 373 large Brazilian firms from 1997 to 2004, using panel data. A Bayesian econometric model was used considering ridge regression for multicollinearity problems among the variables in the model. Prior distributions are assumed for the parameters, classifying the model into random or fixed effects. We used a Bayesian approach to estimate the parameters, considering normal and Student t distributions for the error and assumed that the initial values for the lagged dependent variable are not fixed, but generated by a random process. The recursive predictive density criterion was used for model comparisons. Twenty models were tested and the results indicated that multicollinearity does influence the value of the estimated parameters. Controlling for capital intensity, financial constraints are found to be more important for capital-intensive firms, probably due to their lower profitability indexes, higher fixed costs and higher degree of property diversification.

Cost-effectiveness analysis of PCR for the rapid diagnosis of pulmonary tuberculosis

Background: Tuberculosis is one of the most prominent health problems in the world, causing 1.75 million deaths each year. Rapid clinical diagnosis is important in patients who have comorbidities such as Human Immunodeficiency Virus (HIV) infection. Direct microscopy has low sensitivity and culture takes 3 to 6 weeks [1-3]. Therefore, new tools for TB diagnosis are necessary, especially in health settings with a high prevalence of HIV/TB co-infection. Methods: In a public reference TB/HIV hospital in Brazil, we compared the cost-effectiveness of diagnostic strategies for diagnosis of pulmonary TB: Acid fast bacilli smear microscopy by Ziehl-Neelsen staining (AFB smear) plus culture and AFB smear plus colorimetric test (PCR dot-blot). From May 2003 to May 2004, sputum was collected consecutively from PTB suspects attending the Parthenon Reference Hospital. Sputum samples were examined by AFB smear, culture, and PCR dot-blot. The gold standard was a positive culture combined with the definition of clinical PTB. Cost analysis included health services and patient costs. Results: The AFB smear plus PCR dot-blot require the lowest laboratory investment for equipment (US$ 20,000). The total screening costs are 3.8 times for AFB smear plus culture versus for AFB smear plus PCR dot blot costs (US$ 5,635,760 versus US$ 1,498, 660). Costs per correctly diagnosed case were US$ 50,773 and US$ 13,749 for AFB smear plus culture and AFB smear plus PCR dot-blot, respectively. AFB smear plus PCR dot-blot was more cost-effective than AFB smear plus culture, when the cost of treating all correctly diagnosed cases was considered. The cost of returning patients, which are not treated due to a negative result, to the health service, was higher in AFB smear plus culture than for AFB smear plus PCR dot-blot, US$ 374,778,045 and US$ 110,849,055, respectively. Conclusion: AFB smear associated with PCR dot-blot associated has the potential to be a cost-effective tool in the fight against PTB for patients attended in the TB/HIV reference hospital.

Non-Cardiac Surgery in Developing Countries: Epidemiological Aspects and Economical Opportunities - The Case of Brazil

Background: Worldwide distribution of surgical interventions is unequal. Developed countries account for the majority of surgeries and information about non-cardiac operations in developing countries is scarce. The purpose of our study was to describe the epidemiological data of non-cardiac surgeries performed in Brazil in the last years. Methods and Findings: This is a retrospective cohort study that investigated the time window from 1995 to 2007. We collected information from DATASUS, a national public health system database. The following variables were studied: number of surgeries, in-hospital expenses, blood transfusion related costs, length of stay and case fatality rates. The results were presented as sum, average and percentage. The trend analysis was performed by linear regression model. There were 32,659,513 non-cardiac surgeries performed in Brazil in thirteen years. An increment of 20.42% was observed in the number of surgeries in this period and nowadays nearly 3 million operations are performed annually. The cost of these procedures has increased tremendously in the last years. The increment of surgical cost was almost 200%. The total expenses related to surgical hospitalizations were more than $10 billion in all these years. The yearly cost of surgical procedures to public health system was more than $1.27 billion for all surgical hospitalizations, and in average, U$445.24 per surgical procedure. The total cost of blood transfusion was near $98 million in all years and annually approximately $10 million were spent in perioperative transfusion. The surgical mortality had an increment of 31.11% in the period. Actually, in 2007, the surgical mortality in Brazil was 1.77%. All the variables had a significant increment along the studied period: r square (r(2)) = 0.447 for the number of surgeries (P = 0.012), r(2) = 0.439 for in-hospital expenses (P = 0.014) and r(2) = 0.907 for surgical mortality (P = 0.0055). Conclusion: The volume of surgical procedures has increased substantially in Brazil through the past years. The expenditure related to these procedures and its mortality has also increased as the number of operations. Better planning of public health resource and strategies of investment are needed to supply the crescent demand of surgery in Brazil.

Coordination dynamics and attentional costs of continuous and discontinuous bimanual circle drawing movements

It has been suggested that the temporal control of rhythmic unimianual movements is different between tasks requiring continuous (e.g., circle drawing) and discontinuous movements (e.g., finger tapping). Specifically, for continuous movements temporal regularities are ail emergent property, whereas for tasks that involve discontinuities timing is ail explicit part of the action goal. The present experiment further investigated the control of continuous and discontinuous movements by comparing the coordination dynamics and attentional demands of bimanual continuous circle drawing with bimanual intermittent circle drawing. The intermittent task required participants to insert a 400 ms pause between each cycle while circling. Using dual-task methodology, 15 right-handed participants performed the two circle drawing tasks, while vocally responding to randomly presented auditory probes. The circle drawing tasks were performed in symmetrical and asymmetrical coordination modes and at movement frequencies of 1 Hz and 1.7 Hz. Intermittent circle drawing exhibited superior spatial and temporal accuracy and stability than continuous circle drawing supporting the hypothesis that the two tasks have different underlying control processes. In terms of attentional cost, probe RT was significantly slower during the intermittent circle drawing task than the continuous circle drawing task across both coordination modes and movement frequencies. Of interest was the finding that in the intermittent circling task reaction time (RT) to probes presented during the pause between cycles did not differ from the RT to probes occurring during the circling movement. The differences in attentional demands between the intermittent and continuous circle drawing tasks may reflect the operation of explicit event timing and implicit emergent timing processes, respectively. (C) 2008 Elsevier B.V. All rights reserved.

A contribution for thermoeconomic modelling: A methodology proposal

This work presents a thermoeconomic optimization methodology for the analysis and design of energy systems. This methodology involves economic aspects related to the exergy conception, in order to develop a tool to assist the equipment selection, operation mode choice as well as to optimize the thermal plants design. It also presents the concepts related to exergy in a general scope and in thermoeconomics which combines the thermal sciences principles (thermodynamics, heat transfer, and fluid mechanics) and the economic engineering in order to rationalize energy systems investment decisions, development and operation. Even in this paper, it develops a thermoeconomic methodology through the use of a simple mathematical model, involving thermodynamics parameters and costs evaluation, also defining the objective function as the exergetic production cost. The optimization problem evaluation is developed for two energy systems. First is applied to a steam compression refrigeration system and then to a cogeneration system using backpressure steam turbine. (C) 2010 Elsevier Ltd. All rights reserved.

Financial distress, financial constraint and investment decision: Evidence from Brazil

This paper analyses the presence of financial constraint in the investment decisions of 367 Brazilian firms from 1997 to 2004, using a Bayesian econometric model with group-varying parameters. The motivation for this paper is the use of clustering techniques to group firms in a totally endogenous form. In order to classify the firms we used a hybrid clustering method, that is, hierarchical and non-hierarchical clustering techniques jointly. To estimate the parameters a Bayesian approach was considered. Prior distributions were assumed for the parameters, classifying the model in random or fixed effects. Ordinate predictive density criterion was used to select the model providing a better prediction. We tested thirty models and the better prediction considers the presence of 2 groups in the sample, assuming the fixed effect model with a Student t distribution with 20 degrees of freedom for the error. The results indicate robustness in the identification of financial constraint when the firms are classified by the clustering techniques. (C) 2010 Elsevier B.V. All rights reserved.

FOREIGN INVESTMENT AND THE BRAZILIAN REAL ESTATE MARKET

This article discusses the main aspects of the Brazilian real estate market in order to illustrate if it would be attractive for a typical American real estate investor to buy office-building portfolios in Brazil. The article emphasizes: [i] - the regulatory frontiers, comparing investment securitization, using a typical American REIT structure, with the Brazilian solution, using the Fundo de Investimento Imobiliario - FII; [ii] - the investment quality attributes in the Brazilian market, using an office building prototype, and [iii] - the comparison of [risk vs. yield] generated by an investment in the Brazilian market, using a FII, benchmarked against an existing REIT (OFFICE SUB-SECTOR) in the USA market. We conclude that investing dollars exchanged for Reais [the Brazilian currency] in a FII with a triple A office-building portfolio in the Sao Paulo marketplace will yield an annual income and a premium return above an American REIT investment. The highly aggressive scenario, along with the strong persistent exchange rate detachment to the IGP-M variations, plus instabilities affecting the generation of income, and even if we adopt a 300-point margin for the Brazil-Risk level, demonstrates that an investment opportunity in the Brazilian market, in the segment we have analyzed, outperforms an equivalent investment in the American market.

Hybrid Method to Assess Sensitive Process Interruption Costs Due to Faults in Electric Power Distribution Networks

This paper shows a new hybrid method for risk assessment regarding interruptions in sensitive processes due to faults in electric power distribution systems. This method determines indices related to long duration interruptions and short duration voltage variations (SDVV), such as voltage sags and swells in each customer supplied by the distribution network. Frequency of such occurrences and their impact on customer processes are determined for each bus and classified according to their corresponding magnitude and duration. The method is based on information regarding network configuration, system parameters and protective devices. It randomly generates a number of fault scenarios in order to assess risk areas regarding long duration interruptions and voltage sags and swells in an especially inventive way, including frequency of events according to their magnitude and duration. Based on sensitivity curves, the method determines frequency indices regarding disruption in customer processes that represent equipment malfunction and possible process interruptions due to voltage sags and swells. Such approach allows for the assessment of the annual costs associated with each one of the evaluated power quality indices.

Reconfiguration of distribution networks to minimize loss and disruption costs using genetic algorithms

In this paper a computational implementation of an evolutionary algorithm (EA) is shown in order to tackle the problem of reconfiguring radial distribution systems. The developed module considers power quality indices such as long duration interruptions and customer process disruptions due to voltage sags, by using the Monte Carlo simulation method. Power quality costs are modeled into the mathematical problem formulation, which are added to the cost of network losses. As for the EA codification proposed, a decimal representation is used. The EA operators, namely selection, recombination and mutation, which are considered for the reconfiguration algorithm, are herein analyzed. A number of selection procedures are analyzed, namely tournament, elitism and a mixed technique using both elitism and tournament. The recombination operator was developed by considering a chromosome structure representation that maps the network branches and system radiality, and another structure that takes into account the network topology and feasibility of network operation to exchange genetic material. The topologies regarding the initial population are randomly produced so as radial configurations are produced through the Prim and Kruskal algorithms that rapidly build minimum spanning trees. (C) 2009 Elsevier B.V. All rights reserved.

Exergy-based method for analyzing the composition of the electricity cost generated in gas-fired combined cycle plants

The proposed method to analyze the composition of the cost of electricity is based on the energy conversion processes and the destruction of the exergy through the several thermodynamic processes that comprise a combined cycle power plant. The method uses thermoeconomics to evaluate and allocate the cost of exergy throughout the processes, considering costs related to inputs and investment in equipment. Although the concept may be applied to any combined cycle or cogeneration plant, this work develops only the mathematical modeling for three-pressure heat recovery steam generator (HRSG) configurations and total condensation of the produced steam. It is possible to study any n x 1 plant configuration (n sets of gas turbine and HRSGs associated to one steam turbine generator and condenser) with the developed model, assuming that every train operates identically and in steady state. The presented model was conceived from a complex configuration of a real power plant, over which variations may be applied in order to adapt it to a defined configuration under study [Borelli SJS. Method for the analysis of the composition of electricity costs in combined cycle thermoelectric power plants. Master in Energy Dissertation, Interdisciplinary Program of Energy, Institute of Eletro-technical and Energy, University of Sao Paulo, Sao Paulo, Brazil, 2005 (in Portuguese)]. The variations and adaptations include, for instance, use of reheat, supplementary firing and partial load operation. It is also possible to undertake sensitivity analysis on geometrical equipment parameters. (C) 2007 Elsevier Ltd. All rights reserved.

Are there costs in the repeated mating activities of female Southern stink bugs Nezara viridula?

Mating is an energy demanding process, imposing risks to physical injuries, pathogen infection and predation. Nevertheless, repeated and multiple mating are widespread even in insect species where nuptial gifts are not involved. The effects of repeated mating, by the same male, are examined on the reproductive performance of female Southern green stink bug Nezara viridula (L.). Fecundity is reduced in females mated three or four times, although there is increased longevity. Females mated once or twice produce more egg clusters and concentrate egg-laying activity in the early part of adult life, whereas those mating more often lay eggs throughout the life span, with fewer egg clusters. Although fecundity is negatively affected by the number of matings, egg fertility remains unaffected.

Incorporating demand-side aspects into regional policy: variations in the importance of private investment decision factors across regions

Most regional programs focus on the supply side of regions, emphasizing the attraction conditions offered, such as infrastructure, labor skills, tax incentives, etc. This study analyzes one aspect of the demand side, that is, how investment decisions of private firms are made by asking the question: ""Do corporations decide the same way on investments in different parts of the territory?"" The paper analyzes the investments of 373 large Brazilian firms during 1996-2004. Based on the investment decisions of these firms, the role of sales, cash-flow, external financing, and working capital is investigated through regression analysis. The regional influence is captured by explanatory variables representing regional and firm characteristics, and by interaction dummies between the region and the main investment determinants. The results indicate significant differences across regions in the importance of investment determinants. This information is important for regional development policy, because different mechanisms should be used in different regions to foster private investments.

Heterogeneity, saving-investment dynamics and capital mobility in Latin America

The purpose of this paper is to analyze the dynamics of national saving-investment relationship in order to determine the degree of capital mobility in 12 Latin American countries. The analytically relevant correlation is the short-term one, defined as that between changes in saving and investment. Of special interest is the speed at which variables return to the long run equilibrium relationship, which is interpreted as being negatively related to the degree of capital mobility. The long run correlation, in turn, captures the coefficient implied by the solvency constraint. We find that heterogeneity and cross-section dependence completely change the estimation of the long run coefficient. Besides we obtain a more precise short run coefficient estimate compared to the existent estimates in the literature. There is evidence of an intermediate degree of capital mobility, and the coefficients are extremely stable over time.