A Studies about Sector Wide Approaches: Transaction Costs
Background: After fifteen years of steep educational decline, in 1994 the World Bank initiated discussions on the introduction of a sector wide approach to education development, or Sector Investment Programme, that would encompass the work of all four ministries involved in education and training. Previously, aid to education had been provided through individual donor projects, resulting both in a piecemeal approach to the massive education challenges facing Zambia, and in onerous multiple administrative, technical and management costs for the government. The underlying rationale of the SIP was twofold – to achieve comprehensive strategic progress by aligning donor and country efforts, and to significantly lower the transaction costs associated with a fragmented, projectised approach.
Zambia receives education aid from at least twenty official donors, and this poses major challenges in terms of managing transaction costs. Fifteen donors provided some form of support to the BESSIP, and their involvement was coordinated through a number of planning groups and committees. Perhaps the greatest initial challenge was building sufficient trust to get donors to start relinquishing the visibility, tight financial monitoring and ability to earmark that come from running projects. A critical element in building this trust was the establishment of financial management, procurement and monitoring and evaluation systems that could improve transparency and accountability, with the state of public financial management in the ministry a particular donor concern. Keep reading…
Case Study about Reducing the Cost of Expatriation in Austere Times
Abstract: The purpose of this paper is to explore ways in which the cost of expatriation can be reduced by contrasting expatriate management systems in two successful American companies. Data are gathered using in-depth interviews with international human resource (IHR) managers and analyses of company archival information. Comparative analysis shows striking differences between the two approaches–one more traditional and expensive, the other nontraditional and considerably less expensive. These differences suggest that a wide range of approaches to managing expatriates may be successful, arguing against a set of “best practices.” The analysis suggests less expensive ways of managing expatriates may be possible in some organizations and predicts several contingency factors to consider when designing expatriate management compensation and benefit packages.
Introduction: Businesses typically develop through four phases: domestic, international, multinational, and global (Adler & Gunderson, 2007). Today, there are fewer organizations competing solely on a domestic basis, and more operating globally in one form or another. Electronic media and decreased transportation costs allow even small businesses to compete internationally (Furnham, 1997), and increased competitive pressures frequently require a global presence even if a firm seeks to remain primarily domestic. This expanding global reach of many organizations has increased interest in the issue of expatriate management (Black & Gregersen, 1999; Toh & DeNisi, 2005). Expatriates are home country nationals sent abroad by the parent company to live and work temporarily in another country. In the initial stages of international expansion it is quite common to send expatriates to oversee the development of appropriate systems and procedures consistent with the parent company’s approach and outlook. Keep reading…
The purpose of the crash-based B/C ratio economic analysis is to provide an economic assessment of the extent to which a project or program may achieve its ultimate goal of reducing the number and/or severity of crashes. The B/C ratio analysis ultimately provides a means of selecting the most cost-effective countermeasure(s) for any given project.
The procedure involves the economic evaluation of improvement alternatives to develop effective improvement projects from the candidate alternatives. It is one of the most widely-used methods of screening programs and projects that are being considered for development. The crash-based B/C ratio analysis should be made for those situations that are conducive to its use. The conclusion and recommendations for candidate projects should be based on the results of the B/C ratio analysis.
A Case Study about Developing Harmonised European Approaches for Transport Costing and Project Assessment
Summary: Case studies on four TEN-T projects were selected, the HEATCO methodology applied and compared with the national methodologies and outputs. The outcome can be judged as positive, since the HEATCO methodology was successfully applied in all four cases. No major difficulties were reported on scientific, methodological or technical problems related to the application of HEATCO. A number of sensitivity tests were conducted. The research revealed that the social discount rate and the value of travel time savings VTTS are of particular importance for the outcome of the appraisals and thus sensitivity tests are highly recommended. Sensitivity tests for climate change and noise revealed only minor changes (<5%) of overall benefits.
Objectives: Transport investments on the Trans European Network (TEN) level are usually of large scale and thus require thorough appraisals. The methodology for these investments needs to be consistent, reflect the state of the art and be feasible in its application. HEATCO had the task to develop a harmonised European approach towards transport appraisals that fulfils these requirements. The recommendations were developed and compiled in Deliverable.
A Case Study about Determinants of Price-Earnings Ratio: Chemical Sector of Pakistan
Abstract: Price-to-Earnings (P/E) ratio, a relative valuation technique has always remained at the centre of attention of market analysts and investors ever since the origin of discounted dividend growth model of Gordon and Shapiro (1956). The present study attempts to identify the factors explaining variations in P/E ratio for chemical sector of Pakistan by using Ordinary Least Square (OLS) regression on pooled data of 25 firms listed at Karachi stock exchange for the period 2005 to 2009. Furthermore, taking into account the volatility in Pakistani stock market during the study period, a time-series analysis has also made by using OLS regression model to examine whether determinants of P/E ratio differ across years or not.
Introduction: Considerable research has focused on analyzing the stock market performance using different financial ratios for example Price-to-Earnings (P/E) ratio, Price-toSales ratio, Price-to-Dividend ratio and Book-to-Market ratio (Bodie et el., 2005). However, researchers, market analysts, fund managers and investors mostly rely on Price-to-Earnings ratio for analyzing relative attractiveness of equity investments and use it as a valuation technique for performance evaluation of individual stocks, sectors and markets (Molodovsky 1953). P/E ratio, measured as dividing stock price by earnings per share, alternatively known as “Price Earnings Multiples”, indicates how much investors are willing to pay for each rupee of firm’s earnings.
Case Study about Pharmaceutical Price Controls in OECD Countries
Executive Summary: Improvements in health care and life sciences are an important source of gains in health and longevity globally. The development of innovative pharmaceutical products plays a critical role in ensuring these continued gains. To encourage the continued development of new drugs, economic incentives are essential. These incentives are principally provided through direct and indirect government funding, intellectual property laws, and other policies that favor innovation. Without such incentives, private corporations, which bring to market the vast majority of new drugs, would be less able to assume the risks and costs necessary to continue their research and development (R&D).
The study examined the drug price regulatory systems of 11 OECD countries and found that all rely on some form of price controls to limit spending on pharmaceuticals. The principal methods these governments employ are reference pricing, approval delays and procedural barriers, restrictions on dispensing and prescribing, and reimbursement. These methods prevent companies from charging a market-based price for their products. They also tend to be nontransparent, as the criteria and rationale for certain pharmaceutical prices or reimbursement amounts are not fully disclosed even to the pharmaceutical companies seeking to market their drugs.
A Study about Validity of Company Valuation Using Discounted Cash Flow Methods
Abstract: This paper closely examines theoretical and practical aspects of the widely used discounted cash flows (DCF) valuation method. It assesses its potentials as well as several weaknesses. A special emphasize is being put on the valuation of companies using the DCF method. The paper finds that the discounted cash flow method is a powerful tool to analyze even complex situations. However, the DCF method is subject to massive assumption bias and even slight changes in the underlying assumptions of an analysis can drastically alter the valuation results. A practical example of these implications is given using a scenario analysis.
Introduction: The goal of this paper is to introduce the reader to the method of company valuation using discounted cash flows, often referred to as “DCF”. The DCF method is a standard procedure in modern finance and it is therefore very important to thoroughly understand how the method works and what its limitations and their implications are. Although this paper is on a basic level, it requires some knowledge of accounting and corporate finance, as well as a good understanding of general economic coherencies, since not every topic can be explained in detail due to size limitations.
A Study about Cost-Effectiveness and Cost-Benefit Analysis
Both cost-beneﬁt analysis (CBA) and cost-effectiveness analysis (CEA) are useful tools for program evaluation. Cost – effectiveness analysis is a technique that relates the costs of a program to its key outcomes or beneﬁts. Cost – beneﬁt analysis takes that process one step further, attempting to compare costs with the dollar value of all (or most) of a program ’ s many beneﬁts.
These seemingly straightforward analyses can be applied anytime before, after, or during a program implementation, and they can greatly assist decision makers in assessing a program ’ s efﬁciency. However, the process of conducting a CBA or CEA is much more complicated than it may sound from a summary description. In this chapter we provide an overview of both types of analyses, highlighting the inherent challenges in estimating and calculating program costs and beneﬁts. We organize our discussion around practical steps that are common to both tools, highlighting differences as they arise. We begin with a simple description of each approach.
Case Study about the Use of Cost-effectiveness Analysis in EC’s Evaluations
CEA is more frequent in prospective evaluations. This may be explained by the fact that it is easier to produce an estimate of future effects than to quantify actual effects. In the ex ante evaluation guidelines, there is also a strong request for a comparative analysis of the efficiency of alternative options. The terminology used by the Commission and its external evaluators is all but stabilised. Surprising terms have been encountered like “cost-opportunity” or “ cost-efficiency”.
The terms of reference tend to express efficiency related demands that are not fully specified and that cover only a part of the necessary items (efficiency of what? efficiency in achieving what? efficiency in comparison to what? efficiency question asked for which purpose?). The costing approach tends to focus on the budgetary allocations. Administrative costs and overheads are seldom considered. Another issue is whether EC evaluations should systematically consider EU efficiency in the case of joint financing with Member Sta tes, something which has not been encountered in the study.
Case Study about Cost Management Tool to Eco-Efficiency Measurement: Life Cycle Costing
Introduction: In the field of modern production contexts, the complexity of processes combined with an increasingly dynamic competitive environment has created, in business management, the need to monitor and analyze, in terms of generation costs
The internal production phase but all stages both upstream and downstream in order to minimize the total cost of the product throughout the entire life cycle. The approach of life-cycle cost analysis was used primarily as a tool to support investment decisions and complex projects in the field of defence, transportation, the construction sector and other applications where cost constitutes the strategic analysis of cost components of a project throughout its useful life.