Valuing Flexibility in Private Toll Road Development

Alternative Project Delivery Methods (APDMs) are increasingly being recognized as effective alternatives to the traditional Design-Bid-Build (DBB) approach for transportation projects. As APDMs gain traction among California’s transportation agencies, understanding the legislative frameworks that enable their use and the characteristics of each method is critical. This study benchmarks the existing use of APDMs in California transportation agencies of varying types and sizes, while considering the characteristics (advantages and barriers/challenges to implementation) of each APDM and the authorizations enabling its implementation. Based on these findings, it also provides recommendations for key factors to consider in APDM selection and implementation. The study used a four-pronged mixed-methods approach, including a literature review, content analysis of 30 APDM-related bills (1999–2024), a statewide agency survey, and eight in-depth case studies. Findings reveal growing legislative support for broader APDM adoption with fewer restrictions than in the past, but findings also highlight disparities in implementation between agencies of different types (e.g., state vs. county agencies). Public and private sectors show differing levels of APDM maturity (experience and readiness) and future adoption plans, with greater interest in the Construction Manager/General Contractor (CM/GC) and Progressive Design-Build (PDB) methods than Design Build (DB). Key barriers include limited internal capacity, legislative constraints, and a lack of staff training, particularly among smaller agencies. The study also identifies a strong need for industry-wide awareness and strategic method selection based on project complexity and agency readiness. This study contributes actionable recommendations for legislators, agencies, and contractors to support effective APDM implementation. It lays the groundwork for future research into the effect of agency governance structures and decision-making cultures on APDM implementation and the development of tools to assess agency readiness and support informed APDM selection. This report supports the California State Transportation Committee (CSTC) and the State Legislature's decisions by providing a state-of-the-art exploration of the APDMs used in California and can help shape future APDM legislative directions. By helping agencies understand different project delivery methods, this research supports faster, more cost-effective, and higher-quality transportation projects that better serve California communities.

With the modern corporation investing more in intangible assets, the issue of appropriate accounting for these assets is very much at the fore and formally on the agendas of accounting standards boards. Some commentators advocate that internally generated intangible assets should be booked to the balance sheet, just like tangible assets. This paper explains that this apparently straightforward solution is not so simple. There are subtleties that, when recognised, indicate that such accounting would often make both balance sheets and income statements less informative. In response, the paper outlines an accounting for intangible assets that preserves, indeed enhances, the information conveyed by both the balance sheet and the income statement and satisfies the financial reporting objective of providing information to investors about ‘the amount, timing, and uncertainty of future cash flows’.

Synopsis The research problem This study examined whether country-level loss aversion influences how investors respond to earnings news. Specifically, I examined the stock price sensitivity to negative earnings news vis-à-vis positive earnings news. Motivation Investor expectations about the amount, timing, and uncertainty of future cash flows largely determine a firm’s stock price. An earnings announcement’s primary role is to update expectations, which in turn leads to an update in firms’ stock prices. Historically, researchers have assumed an efficient and unbiased valuation process. However, the last quarter century has seen advances in areas such as behavioral finance that raise the question of under which conditions these assumptions no longer hold. This study investigated the role of investor loss aversion in the market response to negative and positive earnings news. The test hypotheses The first hypothesis is that country-level loss aversion is positively associated with the market response to negative earnings news. Second, country-level loss aversion is negatively associated with the market response to positive earnings news. Third, these associations are moderated by a country’s degree of short-term orientation, restraint vs. indulgence, power distance, and rule of law. Target population The target population includes all available publicly traded companies. Adopted methodology I used OLS on a pooled sample of archival data. Analyses I examined 266,630 annual earnings announcements across 45 countries from 1988 to 2021. I identified country-level loss aversion with two recently developed measures and ascertained investors’ sensitivity to earnings news using earnings response coefficients (ERCs) at both the pooled and country level. ERCs highlight how short-window stock returns covary with earnings news. Findings The results indicated that investors are more sensitive to bad earnings news in more loss-averse countries. In contrast, investor sensitivity to good earnings news is generally unassociated with loss aversion. Further analysis indicated that a subsequent return drift to extreme bad news is present among low-loss-aversion countries but not high-loss-aversion countries, suggesting that loss-averse investors more fully incorporate bad earnings news into stock prices. In contrast, the return drift to extreme positive news is detectable regardless of the level of loss aversion. The influence of loss aversion is more pronounced in countries with a short-term orientation and in countries characterized as more restrained.

This research aims to present an empirical investigation of the relative and incremental predictive ability of alternative accrual- and cash-based accounting measures to forecast future cash flows in an Australian context. To achieve this goal, eight ordinary least squares (OLS) regression models on pooled time-series of cross-sectional data are developed. To evaluate the forecasting performance of the models, both within-sample and out-of-sample forecasting tests are employed. A number of contextual factors, including the length of the operating cash cycle, industry membership, firm profitability and firm size, were taken into account in the main OLS regression analysis of this study to examine whether the predictive ability of accrual- and cash-based data to forecast future cash flows were influenced by these factors. In addition, a more sophisticated approach used for estimating regression models, namely fixed-effects, is undertaken to control for unobseved differences across firms. Results from various regression model analyses suggest that cash flow from operations is more important than earnings in predicting future cash flows. Disaggregating earnings into cash flow from operations and accruals enhances the forecast of future cash flows, compared with aggregate earnings. The accrual component of earnings provides incremental information content for future cash flows beyond that provided by the cash flow component of earnings. Various decompositions of total accruals (i.e., current and non-current accruals, accrual components, and discretionary and nondiscretionary accruals) have incremental information content beyond that contained in total accruals. Disaggregating cash flow from operations into operating cash receipts and payments, as reported under the direct method of cash flow presentation, improves the predictive ability of aggregate cash flow from operations. Indirect cash flow information incrementally enhances the ability of direct cash flow components in forecasting future cash flows. This study also provides evidence that the model based on both accrual and cash flow components outperforms other existing cash flow prediction models. Various categorisations of the sample confirm that the findings are not conditional on the selected control factors. However, the results reveal new knowledge on the characteristics of accrual- and cash-based accounting data relating to future cash flows. For instance, this study documents that cash flow and its components (earnings and accruals) are more (less) informative to market participants in the forecast of a firm’s future cash flows when: (i) the firm is small; (ii) their operating cash cycle is short; and (iii) the firm makes a loss. Furthermore, the level of the predictive ability of both accrual- and cash-based accounting variables varies across industries.

Cash flow prediction is an essential component of economic decision making, particularly in investment and credit evaluation. This paper examines the comparative predictive ability of earnings and operating cash flows variables on future operating cash flows within a developing economy’s setting. Ordinary Least Squares (OLS) method is used to develop regression models over the period of 2002 to 2012. Current operating cash flows, as proxy for future operating cash flows, are regressed on past one, two and three years of earnings and operating cash flows as predictors. Results from the regression analysis reveals earnings and operating cash flows are significant in predicting future operating cash flows but have different predictive powers with earnings providing a superior comparative predictive ability on future cash flows. The paper therefore concludes that earnings are a better predictor of future operating cash flows than historical operating cash flows itself.

Avoiding Distortion in Corporate Valuation Litigation: An Application of Discounted Cash Flow

The impact of alternative project delivery methods (APDM) was compared with that of the traditional method of design–bid–build (DBB) on the long-term performance of transportation projects. The metric used to quantify long-term performance differences between projects is the international roughness index (IRI), which is an indicator of ride quality. Data were collected on four alternative delivery projects on the National Highway System in Arizona and Colorado, along with data on their comparable DBB projects. Two of the projects provided northbound and southbound data and their respective comparisons, so six pairs of projects were investigated. In the study of the IRI time series, five of the six APDM projects were found to perform better than their traditional counterparts. This exploratory study contributes to the body of knowledge by starting to quantify the impact of APDM on the actual long-term performance of transportation projects.

The Effect of SOX on the Predictability of Future Cash Flows in Litigious and Non-litigious Industries

This study evaluated the value-relevance of accounting information (earnings and cash flows) in Indonesia to predict a firm’s future operating cash flows. The predictive usefulness of earnings and cash flows in association with future cash flows is of interest for three reasons. They include providing empirical evidence on the relevant accounting information to assess a firm’s future cash flows, information about the behavior and properties of Indonesian accounting information, and evidence of – or at least providing a basis for evaluating–the validity of the IndonesianAccounting Standards Committee (KPSAK) assertion on the usefulness of accounting information to assess future cash flows.The study evaluated three cash flow prediction models that employed cash flow, earnings, and a combination of earnings-cash flow variables. The models were applied on a firm-specific data set. The data used in this study were semi-annual data for the 61 sample firms (manufacturing firms)listed in the Jakarta Stock Exchange (JSX) spanning the years 1990-1997. The results of this study supported the proposed hypothesis that cash flow data provided better information to assess a firm’s future cash flows than earnings data. Since this study employed manufacturing firms only, future research is necessary to evaluate the robustness of the results to otherpopulations of firms and/or by using an alternative deflator of earnings and cash flows, such as consumer price index (CPI) or market value of the firms. Further extensions of this study include additional refinements of the prediction models on an industry-specific basis and disaggregating cash flow variables into operating, investing, and financing components in order to measure the value-relevance of the statement of cash flows.

For the first time, the use of the V&V concept for the diagnosis of economic security of agricultural enterprises was proposed. This study creates regulatory models for enterprises to make the best decisions in the network of values, when the goal is an efficient and structurally reliable cooperation. The models use theoretical game concepts for multilateral decision making, which involves both cooperation and competition. The purpose of the article was to identify the innovative component of the polystructural process of forming and diagnosing economic security of the enterprise. From a conceptual point of view, it is useful to distinguish between the analysis and diagnostics of the system of economic security of an individual enterprise, from the analysis of economic security of a set of enterprises with clear group characteristics or models. Each individual enterprise or set of enterprises has its own peculiarities that arise as a result of changes in resources and circumstances in the context of local institutions and policies. They turn into productive activities, as well as enterprise consumption and decision-making activities. In this analysis, the system of economic security of a set of enterprises is defined as a combination of small and large enterprises, which, like a group, have similar patterns of life and consumption, as well as constraints and opportunities, and for which such development strategies and interventions would be appropriate. Often such systems have similar agroecological and market conditions. Enterprises usually make their decisions to maximize profits. Profit is the result of incoming and outgoing cash flows, which, on the one hand, depend on the success of the market, and, for example, on operating costs and capital costs, on the other. Consequently, future cash flows determine the level of success, as long as the cost of time is recorded. However, an accurate estimate of future cash flows at the time of the decision is usually unrealistic. Uncertainty, for example, the development of the market, the decisions of competitors, as well as future costs, give rise to high uncertainty in future cash flows.

This paper studies how information disclosure affects investment efficiency and investor welfare in a dynamic setting in which a firm makes sequential investments to adjust its capital stock over time. We show that the effects of accounting disclosures on investment efficiency and investor welfare crucially depend on whether such disclosures convey information about the firm's future capital stock (i.e., balance sheet) or about its future operating cash flows (i.e., earnings). Specifically, investment efficiency and investor welfare unambiguously increase in the precision of disclosures that convey information about the future capital stock, since such disclosures mitigate the current owners' incentives to underinvest. In contrast, when accounting reports provide information about future cash flows, the firm can have incentives to either under- or overinvest depending on the precision of accounting reports and the expected growth in demand. For such disclosures, investment efficiency and investor welfare are maximized by an intermediate level of precision. The two types of accounting disclosures act as substitutes in that the precision of capital stock disclosures that maximizes investment efficiency (and investor welfare) decreases as cash flow disclosures become more informative and vice versa.

This study is quantitative and draws on secondary information from financial records that can be viewed at www.idx.ac.id.. The research population consisted of 10 pharmaceutical companies and 8 research samples obtained using a purposive sampling method for 5 years & the number of samples was 40 observational data. The data analysis technique used is multiple linear regression analysis which was using SPSS 26. The results of the research conducted in this research are: (1) From the results of the regression test, the regression coefficient of the Gross Profit variable is positive. This shows there is such positive influence between Gross Profit and future Cash Flows. It is known that the Sig value shows number that is less than the significance value. then the gross profit partially affects the prediction of future cash flows, (2) From the results of the regression test, the regression coefficient of the variable Operating Profit has no impact on future cash flows. Sig probability value. the greater the significance value, the operating profit partially does not affect the prediction of future cash flows, (3) The regression test's findings indicate that the Net Income variable's regression coefficient has a favorable impact on upcoming cash flows. Probability value for sig. Operating profit partially influences future cash flows if it is greater than the substantial value and a positive coefficient., (4) The value obtained from the F test is 122.176, and the significance level is 0.000. Value of Sig is known. displays a value less than the significance level (0.000 0.05). This leads to the conclusion that gross profit, operating profit, and net profit all have an impact on forecasting future cash flows at the same time. Furthermore, gross profit, operating profit, and net profit can predict future cash flows by 90.3%. While other factors and variables outside of this study can explain and have an impact on the remaining 9.7%.

A company’s sustainability is generally determined by whether it is able to create a positive long-term cash flow. This paper investigates whether the predictive ability of cash flows and earnings in forecasting future cash flows differs depending on the foreign investors’ ownership. Based on firms listed in the Korea Stock Exchange market from 2000 to 2017, we find that earnings and cash flow components of financial statements enhance the predictability of future cash flow in the Korean stock market. Conversely, foreign investors showed a tendency to decide on investments based on operating cash flow instead of earnings when predicting future cash flow. These findings indicate that reliability towards earnings may fall since foreign investors’ concerns are on the prospects of earnings management. These results were strengthened by the addition of several more analyses including cluster analyses, consideration of information asymmetry and the chaebol governance.

The prediction of Cash flow is involved in a number of economic decisions, particularly in investment. Previous research conducted in the United States has provided inconsistency in the results of investigating accounting data, cash flow and accrual accounting data in predicting future cash flows. Few researches were detected addressing the prediction of cash flow in an Egyptian context. This research aims to test the ability of accounting earnings versus cash flows and accruals to predict future cash flows for a sample listed firms in the Egyptian stock exchange. To achieve this objective, a sample of 102 firms from 14 different sectors was collected from year 2012 to 2017 (585 observations after excluding outliers).The empirical results show that past earnings, cash flows and accrual component of earnings can be used to predict future cash flows of Egyptian listed companies and cash flows have better predictive power than past earnings. Additionally, the cash flow model and the cash flow and accrual components of earnings model have better predictive power than the earnings model. The findings of testing the models in an out-of-sample period suggest that the cash flow model is a better predictor of future cash flows than the other models.

The adoption of Automated Valuation Models (AVMs) in the field of property valuation is a trend, considered controversial and not readily accepted by the valuation profession. The aim of the article is to report on a study conducted in an attempt to determine whether the commercial property sector in South Africa is ready to accept and adopt or reject AVMs and to investigate the possibility of AVMs replacing professional valuation services for commercial property valuations. Limited research was available both nationally and internationally on commercial property AVMs. It was found that AVMs utilised for the valuation of commercial property are still in the development phase and cannot be considered feasible as yet. The major concerning factor is that commercial property markets are heterogeneous. AVMs offer various advantages over traditional methods, but there are also some disadvantages, which were identified in the study. Structured interviews were conducted to determine the opinions and sentiments of commercial property professionals towards commercial property AVMs. As no AVM system exists for commercial property in South Africa, no factual opinion or experience was obtained. The general attitudes towards AVMS were negative and a small percentage of respondents indicated that there may be future potential. AVMs were also regarded as a threat to the valuation profession. It was established that there is scope for commercial property AVMS, however, on a limited basis, and the results could be improved by combining these with traditional valuation techniques. Commercial property AVMs will never replace traditional valuations and can be implemented as a useful tool for verification and auditing of values.