Carmichael Infrastructure Investment

An Engineering Perspective
1. Auflage 2014
ISBN: 978-1-4665-7670-4
Verlag: Taylor & Francis
Format: PDF
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 256 Seiten

Established Deterministic Investment Appraisal versus Uncertainty in Investment

When it comes to investing in an infrastructure project, the conventional approach is to evaluate risk through a deterministic approach. Infrastructure Investment: An Engineering Perspective, however, takes on uncertainty in investment. Of interest to engineering consultants, government departments, financial institutions, or anyone involved in investment in infrastructure, this text provides the necessary tools for the analysis and appraisal of investment in infrastructure and other assets with uncertain futures.

It factors in the finance and engineering of assets such as roads, buildings, bridges, dams, pipelines, railways, ports, seawalls, wastewater treatment facilities, and addresses future demand, operating costs, maintenance costs, and other lifetime and investment parameters in both financial and non-financial terms. It considers the impact of climate change and the possible use of adaptive and flexible solutions capable of responding to changed futures, as well as how such uncertainty affects the future performance of these investments. The book also incorporates illustrated case studies and Markov chains to model an investment.

A pivotal work containing 11 chapters, this text provides:

- An original contribution to feasibility analysis under uncertainty

- A systematic and ordered treatment of capital investment in infrastructure

- A structured flow, from a systematic treatment of conventional deterministic approaches through to a complete treatment incorporating uncertainty

Infrastructure Investment: An Engineering Perspective details investment analysis in the presence of uncertainty, and is beneficial to students, academics, and practitioners dealing with decision-making in infrastructure and similar investments.

Zielgruppe

Students, academics and practitioners involved in decision-making on infrastructure, assets and similar investments.

Autoren/Hrsg.

Carmichael, David G.

Fachgebiete

• Technische Wissenschaften Bauingenieurwesen Bauingenieurwesen

Inhaltsverzeichnis

Introduction

Appraisal

Outline

Part I - Deterministic

Benefits, costs and time value

Single and multiple investments

Interest

Appraisal

Measures

Present worth

Annual worth

Internal rate of return

Payback period

Benefit: cost ratio

Example calculations

Appraisal: Extensions and comments

Introduction

Apparent conflict

Negative benefits

Uncertainty

Choice of interest rate

Inflation

Nonfinancial matters/intangibles

Part II - Probabilistic

Background

Introduction

Preferred analysis framework

Measures of viability and preference

Options

Obtaining estimates

Summary probabilistic appraisal

Probabilistic cash flows

Introduction

Formulation

Interest rate

Probabilistic cash flows and lifespan

Example: Commercial investment

Managed investment in primary production

Clean development mechanism additionality

Multiple projects/ventures

Benefit: cost ratio

Real options

Introduction

A present worth focus

Call and put options

Implementation

Example calculation of option value

Real option types and examples

Introduction

Categorization

Outline demonstrations

Climate change and infrastructure

Adaptable, flexible infrastructure

Carbon farming initiative

Mining options

Fast-tracked projects

Convertible contracts

Financial options

Introduction

A present worth focus

Further comment

European financial option

American financial option

Example calculation of option value

Example implementation of the approach given

Exotic options

Carbon options

Employee stock options

Random cash flows and interest rates

Adjustments

Probabilistic cash flows and interest rates

Introduction

Investment analysis

Case study – gas transmission pipeline

Case study – index option

Summary

Variable and fixed rate loan equivalence

Markov chains and investment analysis

Introduction

Markov chains

State choice and transition probability estimation

Example

Payback period and internal rate of return

Discussion

Bibliography and references

Über Autor(innen)

David G. Carmichael is professor of civil engineering and former head of the Department of Engineering Construction and Management at the University of New South Wales, Australia. He is a graduate of the Universities of Sydney and Canterbury; a fellow of the Institution of Engineers, Australia; a member of the American Society of Civil Engineers; and a former graded arbitrator and mediator. Professor Carmichael publishes, teaches, and consults widely in most aspects of project management, construction management, systems engineering, and problem solving. He is the author of Problem Solving for Engineers, also published by CRC Press.