When Does Better Scenario Modelling Improve Financeability? A Decision-Coupled Evaluation for Offshore Wind-to-Hydrogen

The economic viability of offshore wind‐to‐hydrogen systems depends heavily on the accuracy of wind‐speed forecasting. We evaluated three probabilistic scenario generators (historical bootstrapping, parametric Weibull fitting, and calibrated long short‐term memory (LSTM) sequence model) using a decision‐coupled framework. From 61 years of ERA5, we created 1000 synthetic 23‐year hourly scenarios per method, propagated them through a techno‐economic model, and scored the continuous ranked probability score (CRPS) on economic distributions (levelized cost of hydrogen (LCOH), net present value (NPV), and interest rate of return (IRR)). We report the decision bandwidth and its elasticity to skill, and run a financing price sweep to meet probability targets. Relative to bootstrapping and Weibull, the LSTM lowers CRPS by 30% for LCOH and NPV (25% for IRR), narrowing risk bands at similar medians. The hydrogen price required to reach more than 90% probability is €7.76–7.78/kg for Pr ( NPV > 0) and €9.16‐9.18/kg for Pr ( NPV > 0 and IRR > 10%). A cross‐method spread of less than €0.02/kg indicates a threshold‐saturated regime, in which better skills mainly contract risk. Robustness tests shift medians, but preserve method ranking and thresholds. This framework translates probabilistic forecasting skills into finance ability metrics for wind‐to‐hydrogen screening and policy design.

Two of the most important criteria are the net present value (NPV) and the internal rate of return (IRR) for choosing among investment projects. In many circumstances, investment projects are ranked in the same order by both criteria. In some situations, however, the two criteria provide different rankings. The debate is an old one (e.g. going back to Böhm-Bawerk, 1884). Let us explain the essence of the NPV and IRR indicators. The basis of economic calculations in the field of investment is the idea that a cash euro today is more valuable than a euro promised in a year. If a bank lends N euros to an entrepreneur today, then in a year the bank demands to return N(1 + E) euros, where E is the bank interest. Another type of calculation is carried out by the entrepreneur. If he invests N euros in some project today, then in a year he hopes to receive N(1 + IRR) euros, where IRR is the internal rate of return of the project implemented by the entrepreneur. Naturally, the value of IRR is only an assumed, indicative, and the entrepreneur is expecting IRR more than E. The present work arose from discussions of the results of the French economist Pierre Masse “Le Choix des investissements, critères et méthodes” published in 1959. The main goal of the paper is to give the proof of both IRR and NPV formulas (in a particular simplified case) and a geometric interpretation of these very complex equations (useful for the training purpose, at least). The analysis of IRR and NPV indicates an unequivocal choice among the criteria NPV and IRR. This confirms a simple numerical example on the fallacy of Masse’s IRR reasoning. No unambiguous solution has been found yet. It can be explained if we allow that the bank interest relates to Macroeconomics, largely concerned with nation scale projects but the entrepreneur interest relates to Microeconomics, to internal rate of return. The world continues to search for a single consistent criterion for evaluating investments.

Internal Rate Of Return Revisited

High unemployment rate has encouraged the growth of various business units as job providers for productive age. This study aims to examine the business opportunities of cow farming in Gorontalo region. It uses combination of qualitative and quantitative method. The qualitative method is done by observation and interview. The quantitative analysis is done by calculating cash flow, net present value (NPV), internal rate of return (IRR), benefit cost ratio, and gross margin. The results showed that traditional system of cow farming business by self-management and profit sharing has profitable cash flow, NPV, IRR, BC ratios, and gross margin and worthy for selected. The Cash flow and NPV are positive and IRR level is greater than the required profit level. A semi-modern cow cage system for fattening produces lower cash flow, NPV, IRR, BC ratios, and gross margin. The cages cow breeding produces more attractive cash flow, NPV, IRR, BC ratios and gross margin. Keywords: investment, cow, fattening, breeding, cash flow, NPV, IRR. DOI: 10.7176/RJFA/12-22-13 Publication date: November 30th 2021

Pipe-in-Pipe technology is a pipeline system consisting of two coaxial pipes. The inner pipe carries the fluid and is encased within a larger diameter outer pipe which seals the annulus between the two pipes. The annulus can be filled with a wide range of thermal insulating materials such as fiberglass, glasswool, microporous materials, aerogel, polyurethane foam, ceramics etc. This is seen as a solution to the effective management of the long problem of flow assurance in subsea fields. The pipe-in-pipe technology is thought to be extensively ideal for the transportation of well bore fluids from a subsea field, as it is capable of withstanding the difficult conditions of the ocean with its low overall heat transfer coefficient (OHTC) of less than 1 W/m2K, but this it does achieve at added cost. The aim of this paper is to economically analyze the pipe-in-pipe technology using a case study of Rosa field, an offshore field off the coast of Angola relative to offshore Gas Development in Nigeria. The following profitability indices; Net present value (NPV), internal rate of return (IRR), Profitability index and Payout or payback period were used to compare the cost of a pipe-in-pipe technology and that of a conventional pipeline system for an oil and gas field. For the pipe-in-pipe technology, a real NPV of $5.5 billion, IRR of 65.7%, PI of 3.22and payback period of 1.46 years and a money of the day NPV of $10 billion, IRR of 82.1%, PI of 5.0 and payback period of 1.19 years were achieved while for a conventional pipeline, a real NPV of $5.6 billion, IRR of 66.5%, PI of 3.28 and payback period of 1.49 years and money of the day NPV of $10.1 billion, IRR of 83%, PI of 5.1 and payback period of 1.16 years were achieved.

Biomass gasification based power plants can play an important role in power sector in Malaysia with her abundant agricultural and forest resources. In this research energy and economic feasibility, and environmental impact of biomass gasification power plant has been analyzed and assessed for sustainable power generation in Malaysia, the plant being a clean development mechanism supported project. Gasification based power generation with a dual fuel internal combustion engine is found more biomass combustion power plant. But, the annual fuel cost is significantly higher with gasification plant claiming MYR 10 million/y for a generation of 67,500 MWh. The net present value, internal rate of return, and PBP for a 10-MW gasification based dual fuel internal combustion engine power plant without loan financing using empty fruit bunch pellet as biomass; with CER issued at USD16/tCO 2 ; and without loan financing provides net present value, internal rate of return, and PBP of MYR 19.68 million, 11.90%, and 6.05 y, respectively. With a loan financing at 3% per year with CER still be effective the net present value, internal rate of return, and PBP is estimated to be MYR 7.03 million, 3.97%, and 11.78 y, respectively. However, if a 60:40 debt equity is applied then the project net present value, internal rate of return, and payback period seen to improve slightly. The net present value attains a positive value of MYR 3.6 million. Internal rate of return and PBP values are found to be 7.08% and 8.27 y, respectively. The emission reduction achieved with the plant is 17,863 t CO 2 /y, 206 t SO 2 /y, 90 t NOx/y, and 10.37 t CO/y, respectively. Energy efficiency and tariff policy have been found to have highest impact on economic profitability of gasification based power generation units.

Summary Discounted cash flow methods for evaluating investment opportunities enjoy wide use in the petroleum industry. The two most popular measures are net present value and internal rate of return. While these two measures are generally suitable as accept/reject criteria, they are not so useful in capital rationing situations, where a ranking of projects is required. Decades ago authorities suggested that the net present value divided by the initial outlay is a better measure for ranking projects. This kind of measure becomes more difficult to apply correctly when ail the capital costs in a project are not incurred up front, but are spread over a number of years. It is common practice to discount these future capital outlays back to the present and include them in investment (the divisor in the index). Simple examples demonstrate, however, that some obviously erroneous rankings can result from this procedure. By using an alternative definition of project investment, based only on the project net cash flows and the discount rate, we can avoid these pitfalls and obtain a better profitability measure for ranking projects.

Aquaculture in Floating Net Cage (FNC) is one of the reliable aquaculture technologies that is used to optimize the utilization of waters on rivers, lakes and reservoirs. The types of fish that is usually preserved in Floating Net Cage are Gold Fish ( Cyprinus carpio ) and Nile Tilapia ( Oreochromis niloticus ). Survey method is applied in this research and data sample is drawn from the farmer population of floating net cages in Kecamatan Pinoh Utara. The objective of this study is to determine the financial feasibility of aquaculture with Floating Net Cage (FNC) system. This achieved by considering Net Present Value (NPV), IRR (Internal Rate of Return), Net Benefit-Cost Ratio (B/C Ratio), Analysis of PP (Payback Periods) and Sensitivity Analysis. The result indicates that aquaculture of Nile Tilapia and Gold-Fish with Floating Net Cage (FNC) system was financially significant shown by Net Presents Value (NPV) 227.246.769,84 rupiahs, Internal Rate of Return (IRR) 190,97%, Net Benefit Cost ratio (B/C Ratio) 4,34 and Payback Periods (PP) 0,53 years (6 months 10 days). The sensitivity analysis indicates that if there was an increase in operational costs, the amount should not be more than 304,19% and if there was a decrease in profits, the amount should not be more than 44,11%. Keywords: Financial Analysis, Aquaculture, Floating Net Cage, Net Present Value (NPV), Internal Rate of Return (IRR), Net Benefit-Cost Ratio (B/C Ratio).

PurposeThe purpose of this paper is to contribute to financial managers’ capital budgeting decision-making processes by proposing a new paradigm of capital investment appraisal. The expected return, required return structure of the proposed purchasing power return (PPR) methodology eliminates the many flaws associated with the competing internal rate of return (IRR) and modified IRR (MIRR) techniques.Design/methodology/approachThe authors provide a new framework for examining long-term investment projects through a percentage return prism. Unlike that of IRR and MIRR, mathematical consistency with net present value (NPV) is a design requirement.FindingsPPR eliminates the many flaws found in the IRR and MIRR methodologies, is mathematically consistent with NPV, and identifies positive-NPV investments forecasted to reduce the company’s purchasing power. These projects are acceptable under NPV, but flagged for additional review and potential rejection. Created to examine projects on a percentage return basis, PPR employs market-based inflation rates to convert all cash flows into constant purchasing power units of measure. From these units, an expected real return is estimated and compared to the project’s inflation-adjusted required return, resulting in an accept/reject decision consistent with that of NPV.Originality/valueThe proposed PPR is a new paradigm of capital investment appraisal that eliminates the many problems found in the IRR and MIRR techniques, is mathematically consistent with the NPV method, and helps financial decision makers examine investment projects on an expected percentage return basis. PPR also flags for further review projects expected to actually reduce the company’s purchasing power.

The Reinvestment Rate Assumption Fallacy for IRR and NPV

The economic feasibility of commercial bioactive compound process from fermented soybeans

Revisiting Net Present Value: Usage, Challenges, and Implications for Corporate Finance

Sempol Ayam Crispy Maw.Ih outlet is a business engaged in the culinary field that will be opened in the city of Bandung using a take away service system. In this study, the market aspect was examined by distributing questionnaires to 100 respondents who were residents of the city of Bandung with an age range of 15-64 years. The results of the distribution of this questionnaire show that the percentage of the number of potential markets is 94%, the available market is 90%, and for the target market, Sempol Ayam Crispy Maw.Ih sets a target of 0.4% of the available market. For the technical and financial aspects, secondary data is used. obtained from several sources. The results of the projected feasibility calculation for five years show that the MARR percentage is 13%, the Net Present Value (NPV) is Rp.123.256.159, the Internal Rate of Return (IRR) is 59%, and the Pay Back Period (PBP) is 1 year. 9 months. Due to the NPV > 0, the IRR > MARR, and the PBP is not greater than the financial projection period, the opening of the Sempol Ayam Crispy Maw.Ih outlet is feasible. Sempol Ayam Crispy Maw.Ih outlet is a business engaged in the culinary field that will be opened in the city of Bandung using a take away service system. In this study, the market aspect was examined by distributing questionnaires to 100 respondents who were residents of the city of Bandung with an age range of 15-64 years. The results of the distribution of this questionnaire show that the percentage of the number of potential markets is 94%, the available market is 90%, and for the target market, Sempol Ayam Crispy Maw.Ih sets a target of 0.4% of the available market. For the technical and financial aspects, secondary data is used. obtained from several sources. The results of the projected feasibility calculation for five years show that the MARR percentage is 13%, the Net Present Value (NPV) is Rp.123.256.159, the Internal Rate of Return (IRR) is 59%, and the Pay Back Period (PBP) is 1 year. 9 months. Due to the NPV > 0, the IRR > MARR, and the PBP is not greater than the financial projection period, the opening of the Sempol Ayam Crispy Maw.Ih outlet is feasible.

Black pepper (Piper nigrum) stands out as one of the most valued spices in the global market, with Brazil occupying a strategic position in production, especially in Espírito Santo, being the largest producing state in the country. This study analyzes the economic feasibility of implementing raffia in black pepper crops, focusing on reducing post-harvest losses and optimizing operational costs and environmental sustainability. Data were collected in black pepper crops, specifically at Fazenda Duas Barras, in the city of Pinheiros, ES, Brazil. Two cultivation systems were designed and compared: The traditional black pepper cultivation system without the implementation of raffia blanket, with an average production of 4000 kg ha−1 and harvest cost of USD 7433.63 ha−1; and the black pepper cultivation system with the implementation of raffia blanket, production increased to 4500 kg ha−1, with a 60% reduction in harvest cost. Using established financial indicators (NPV, IRR, and Payback), it is demonstrated that the investment presents a return in 2.4 years, with an Internal Rate of Return (IRR) of 51% and a Net Present Value (NPV) of USD 59,150.44 ha−1 year−1. The sensitivity analysis shows economic resilience even in adverse scenarios, consolidating the technology as a viable alternative for small and medium-sized producers.

Abstract. The utilization of former mining areas for tourism purposes serves as a solution for land reclamation and post-mining economic value enhancement. PT XYZ in Batubalak Village, South Lampung Regency, has a former andesite mining area with potential to be developed into a tourist destination. This study aims to analyze the financial feasibility of converting the mining land into a tourist attraction by examining Benefit Cost Ratio. The research method employed project feasibility analysis, including calculations of Break Event Point (BEP), Cashflow, Payback Period (PBP), Net Present Value (NPV), and Internal Rate of Return (IRR). Data were collected through field studies, stakeholder interviews, and cost-revenue analysis. Key assumptions such as discount rates, visitor estimates, and operational costs were tested for sensitivity to ensure result reliability. The results indicate that the project is feasible under a realistic interest rate (6.75%), supported by a positive NPV, acceptable IRR, and reasonable payback period. However, high risk arises if the investor's required return rate is overly aggressive (18.75%), which could jeopardize financial feasibility. Thus, the project's success heavily depends on cash flow stability and market conditions. The study recommends risk management strategies and effective marketing to minimize uncertainties. Abstrak. Pemanfaatan lahan bekas tambang untuk objek wisata merupakan salah satu solusi dalam upaya reklamasi dan peningkatan nilai ekonomi lahan pasca-penambangan. PT XYZ di Desa Batubalak, Kabupaten Lampung Selatan, memiliki areal bekas tambang andesit yang berpotensi dikembangkan sebagai destinasi wisata. Penelitian ini bertujuan menganalisis kelayakan finansial proyek konversi lahan tambang menjadi objek wisata dengan memperhatikan aspek break-even point, payback period, dan pengembalian investasi. Metode penelitian yang digunakan adalah analisis kelayakan proyek meliputi perhitungan Break Even Point (BEP), Cashflow, Payback Period (PBP), Net Present Value (NPV), dan Internal Rate of Return (IRR). Data dikumpulkan melalui studi lapangan, wawancara dengan pemangku kepentingan, serta analisis biaya dan pendapatan proyek. Asumsi dasar seperti tingkat diskonto, estimasi pengunjung, dan biaya operasional diuji secara sensitivitas untuk memastikan keandalan hasil. Hasil penelitian menunjukkan bahwa proyek ini layak dijalankan dengan tingkat suku bunga realistis (6,75%), ditunjukkan oleh NPV positif, IRR melebihi biaya modal, dan payback period yang masuk akal. Namun, risiko tinggi muncul jika tingkat pengembalian yang diminta investor terlalu agresif (18,75%), yang dapat mengganggu kelayakan finansial. Dengan demikian, keberhasilan proyek sangat bergantung pada stabilitas asumsi arus kas dan kondisi pasar. Rekomendasi dari studi ini adalah perlunya manajemen risiko dan strategi pemasaran yang efektif untuk meminimalkan ketidakpastian.