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Purpose This paper aims to examine the capital budgeting practices used by firms in Barbados using contingency theory. Design/methodology/approach The study involves the use of a self-administered questionnaire sent to the individual responsible for capital budgeting decisions (either the accountant, financial controller or senior manager) in each of the firms selected. In total, 41 completed questionnaires are received; 12 follow-up interviews are conducted with respondents to indicate the reasons for use and non-use of capital budgeting practices. Findings Capital budgeting practices are not widely used by firms in Barbados. The payback method (PBM) is determined to be the preferred method of choice because of its simplicity, agility and cultural practices. Based on contingency theory, organisations in Barbados believe that the PBM is a better fit for them. Top management drives the capital budgeting process with crude and non-traditional methods for the acceptance of capital projects. While there are no statistically significant differences in the capital budgeting practices used in different sectors, professional accountants are more likely to use net present value and sensitivity analysis than non-professional accountants. Research limitations/implications The sample is small, and consequently, findings may not be generalisable to the population. Originality/value This study makes a significant contribution to the body of literature in emerging countries such as Barbados on the usage of capital budgeting practices and factors that may influence their usage. It further contributes to policymakers, practitioners, organisations and stakeholders of organisations.

Surprisingly, little is known whether the net present value (NPV) used as a financial metric in budgeting and investment planning to analyse a projects’ profitability is universal. Meanwhile, the epochal green energy revolution ensuring carbon neutrality through green innovations requires enormous investments, and projects realised must ensure energy security. Therefore, there is a need to reanalyse financial metrics used in financial planning, including NPV. We eliminate this research gap and, based on data from Poland, Romania, Hungary, Croatia, the USA, the United Kingdom, Japan, Israel, and Euro Zone, explain why one may not perceive the currently used NPV formula as a universal financial metric. We show that the variable discount rate influences the time value of money. Therefore, there is a need to redefine the NPV formula. This study makes two main contributions. First, it creates new ground by revisiting the NPV formula in the emerging market context compared to stable economies and contributes to developing business and management theory. Second, we propose and empirically verify the modified NPV formula as a financial metric that considers the situation of energy firms in emerging markets. Thus, this research helps the capital budgeting process, and the modified NPV formula can help provide optimal outcomes in firms, helping to reduce financial risks. Our study contributes to a further contextual diagnosis of business projects and can, in turn, be relevant for other energy sector analyses.

The performance evaluation of local self-government entities is very difficult, as their primary goal is not to make a profit, but to provide services to their residents that will contribute to an increase in their quality of life. In this context, it is necessary to evaluate their activity from the point of view of several available criteria, for which it is possible to find relevant and recognized sources. The presented research works with five criteria, identified by the Institute for Economic and Social Reforms, and aims to quantify the agreement of the results of the assessment of the financial health of territorial self-government entities in 2020 using the TOPSIS technique with a gradually decreasing number of criteria. For this purpose, a total of 26 combinations of criteria are created, with the number of 5, 4, 3 and 2 used criteria, the importance of which is determined based on their absolute variability using the standard deviation method. The results obtained in this way are interpreted using a wide range of mathematical and statistical methods including the Kolmogorov-Smirnov test, Levene test, Jaccard index and others. As a result, the multi-criteria evaluation of territorial self-government subjects (in our case, district cities) proved to be highly applicable. However, the result itself is largely determined by the structure and number of entry criteria. Based on the performed analyses, we can see that significant differences result from their reduction. Each such reduction has an impact on the overall results, but it is possible to find combinations that defy this conclusion.

Background Translating research, achieving impact, and assessing impact are important aspirations for all research collaboratives but can prove challenging. The Hunter Cancer Research Alliance (HCRA) was funded from 2014 to 2021 to enhance capacity and productivity in cancer research in a regional centre in Australia. This study aimed to assess the impact and benefit of the HCRA to help inform future research investments of this type. Method The Framework to Assess the Impact from Translational health research (FAIT) was selected as the preferred methodology. FAIT incorporates three validated methodologies for assessing impact: 1) Modified Payback; 2) Economic Analysis; and 3) Narrative overview and case studies. All three FAIT methods are underpinned by a Program Logic Model. Data were collected from HCRA and the University of Newcastle administrative records, directly from HCRA members, and website searches. Results In addition to advancing knowledge and providing capacity building support to members via grants, fellowships, scholarships, training, events and targeted translation support, key impacts of HCRA-member research teams included: (i) the establishment of a regional biobank that has distributed over 13,600 samples and became largely self-sustaining; (ii) conservatively leveraging $43.8 M (s.a.$20.5 M - $160.5 M) in funding and support from the initial $9.7 M investment; (iii) contributing to clinical practice guidelines and securing a patent for identification of stem cells for endometrial cell regeneration; (iv) shifting the treatment paradigm for all tumour types that rely on nerve cell innervation, (v) development and implementation of the world’s first real-time patient treatment verification system (Watchdog); (vi) inventing the effective ‘EAT’ psychological intervention to improve nutrition and outcomes in people experiencing radiotherapy for head and neck cancer; (vi) developing effective interventions to reduce smoking rates among priority groups, currently being rolled out to disadvantaged populations in NSW; and (vii) establishing a Consumer Advisory Panel and Consumer Engagement Committee to increase consumer involvement in research. Conclusion Using FAIT methodology, we have demonstrated the significant impact and downstream benefits that can be achieved by the provision of infrastructure-type funding to regional and rural research collaboratives to help address inequities in research activity and health outcomes and demonstrates a positive return on investment.

The levelized cost of electricity (LCOE) is used widely to compare the economic competitiveness of the energy mix. This method is easy to understand and simple to apply, which makes it preferable for many energy policymakers. However, the method has several disadvantages from the energy business perspective. First, the LCOE approach does not consider revenue, and a high-interest rate usually correlates with the tariff growth rate. Thus, if a high-interest rate increases the cost, that high rate increases the revenue, which can affect economic competitiveness. Second, the LCOE does not consider different stakeholders. Equity investors and loan investors have different interests depending on different financial indicators, which influence the same energy sources’ differential economic attractiveness. This study analyzes and compares the LCOE, Project Internal Rate of Return (Project IRR), Equity Internal Rate of Return (Equity IRR), and Debt Service Coverage Ratio (DSCR) of an illustrative wind, coal, and nuclear power project using Monte-Carlo simulations. The results show that energy sources’ economic competitiveness can vary depending on financial indicators. This study will help energy policymakers develop more economically realistic energy portfolios.

This study investigates how changes in energy prices, interest rates, and investment costs impact the Net Present Value (NPV) and Internal Rate of Return (IRR) of three alternative energy projects: a solar PV (photovoltaic) system, a woodchip-fired boiler, and a heat pump system. Rather than comparing these projects directly, the paper aims to illustrate how returns on alternative energy investments have evolved under economic conditions specific to Hungary. The central focus of this study is to highlight the economic rationality of postponement decisions which is one of the most adverse effects of unpredictability, in addition to the numerous inhibiting factors listed in the professional literature. In conclusion, this study highlights the inherent risks in making investment decisions at any single time for projects expected to yield returns over the long term, emphasising the importance of evaluating the main factors that affect potential returns. In all three projects, the application of random shocks shows that the probability of a negative net present value, i.e. non-return on project expenditure, is greater than 55%. Through the case studies presented, the study shows that the state has a role to play in reducing risk by providing investment subsidies, tax incentives, favourable fixed-rate credit schemes and a predictable regulatory environment.

Despite their obvious benefit in terms of energy efficiency and their potential benefit on pollutant emissions, Flue Gas Condensers (FGCs) are still not widely spread in biomass combustion plants. Although their costs have significantly decreased during the last decade, the economic viability of FGC retrofits is not straightforward and their return on investments is mainly dependent on the temperature of the available heat sink and the moisture content of the fuel. Based on a new techno-economic model of a FGC validated with recent industrial data, this paper presents a methodology to assess the economic viability of an FGC retrofitting in a medium-scale biomass combustion plant. The proposed methodology is applied to the case of a typical District Heating plant for which real data was collected. For the first time, the usual assumptions of constant process data generally used are challenged by considering the variability of the return temperature and heat demand over the year. Furthermore, a new concept of optimal configurations in terms of energy savings is introduced in this paper and compared to a strictly economic optimum. The economic feasibility is mainly evaluated by means of the Net Present Value (NPV), Discounted Payback Period (DPP), and the Modified Internal Rate of Return (MIRR). As expected, results show that the higher the humidity level and the lower the return temperature, the higher the economic profitability of a project. The NPV is, however, increased when considering variable inputs: Even with an average return temperature of 60 °C, a mixed operation of the FGC as a condenser and an economizer along the year is predicted, which results in an increased profitability assessment. Considering a constant return temperature over the year can lead to a 20% underestimation of the project NPV. An alternative averaging method is proposed, where two distinct temperature zones are considered: above and below the flue gas dew point. The discrepancy with a detailed temperature variation is reduced to a few percents. Our results also show that increasing the FGC surface beyond the highest NPV can lead to substantial energy savings at a reasonable cost, up to a certain level. The energetic optimum we defined can lead to an increase in energy savings by 17% for the same relative decrease of the NPV.

PurposeThe purpose of this paper is to investigate the current capital budgeting practices in Bangladeshi listed companies and provide a normative framework (guidelines) for practitioners.Design/methodology/approachData were collected with a structured questionnaire survey taking from the chief financial officers (CFOs) of companies listed in the Dhaka Stock Exchange in Bangladesh. Garnered data were then analyzed using descriptive and inferential statistical techniques.FindingsThe results found that net present value was the most prevalent capital budgeting method, followed closely by internal rate of return and payback period. Similarly, the weighted average cost of capital was found to be the widely used method for calculating cost of capital. Further, results also revealed that CFOs adjust their risk factor using discount rate.Originality/valueThe findings of this study might help the firms, policymakers and practitioners to take a wise decision while evaluating investment projects. Additionally, this study’s findings enrich the existing body of knowledge in the field of capital budgeting practices by providing more reliable and comprehensive analysis taking samples from a developing economy.

Modern-day firms, both small and medium enterprises (SMEs) and large listed firms (LLFs) practice distinct investment appraisal approaches known as conventional and sophisticated capital budgeting techniques. Despite these prominent developments, the extant literature is yet to empirically examine the impact of these approaches on the financial performance (FP) of respective firms. This study aims to analyze and compare the impact of conventional and sophisticated capital budgeting techniques on the FP of SMEs and LLFs. Following the logic of real option and contingency theories, the payback method and average/accounting rate of return are conceptualized as conventional whereas, net present value, internal rate of return, and profitability index are used as sophisticated capital budgeting techniques. The associated data of 500 Indonesian firms between 2011 and 2020 was obtained and analyzed using the generalized method of moments (GMM) technique. After addressing multicollinearity and heterogeneity issues, the preliminary findings indicate that conventional capital budgeting techniques are not a significant predictor of the FP of SMEs. Conversely, it is observed that sophisticated capital budgeting techniques have a strong and positive effect on the FP of LLFs. The robustness checks confirmed that sophisticated capital budgeting techniques are the significant predictors of the FP of both SMEs and LLFs. The findings of this study are novel and contribute to validating the use of sophisticated capital budgeting techniques for SMEs and LLFs of emerging economies to realize optimal financial outcomes of their investments. Capital budgeting decisions are key to maximizing stakeholders' wealth. Its success hinges on selecting the most viable capital budgeting technique (CBT) from the pool of available techniques. The key criteria used by firms of different sizes such as SMEs and large listed firms is the financial outcomes of adopted CBT. The firms in developing economies particularly located in Southeast Asia remain in dilemma on deciding a financially feasible CBT. This research aims to resolve this issue by examining the impact of different capital budgeting techniques on the financial performance of firms of different sizes. The empirical findings of this study expect to validate the relevance of a financially feasible CBT which can be used as a benchmark by firms of different sizes operating in developing countries for perusing capital budgeting and investment decisions.

PurposeThe purpose of this study is to ensure productive, robust and sustainable production systems by enabling future investments in maintenance. This study aims to provide a deeper understanding of the investment process and thereby facilitate future maintenance-related investments. The objectives are to describe the investment process, map the decision support and roles involved and identify factors influencing the process.Design/methodology/approachThe study was designed as a multiple-case study, with three industrial cases of maintenance-related investments. A structured coding procedure was used to analyse the empirical data from the cases.FindingsThis paper provides a deeper understanding of the process of maintenance-related investments. Eleven factors influencing the investment process could be identified, three of which were seen in all three cases. These three factors are: fact-based decision-support, internal integration and foresight.Practical implicationsInvestments in modern maintenance are needed to ensure productive, robust and sustainable production in the future. However, it is a challenge in manufacturing industry to justify maintenance-related investments. This challenge may be solved by developing a decision-support system, or a structured work procedure, that considers the findings of this study.Originality/valueFrom this study, an extended view of the relation between quantifying effects of maintenance and maintenance-related investment is proposed, including surrounding factors influencing the investment process. The factors were identified using a structured and transparent coding procedure which is rarely used in maintenance research.