scholarly journals Financing Cost Optimization in Construction Sector: A Review

2020 ◽  
Vol 26 (10) ◽  
pp. 94-108
Author(s):  
Saja Hadi Aldhamad ◽  
Sedqi Esmaeel Rezouki
Keyword(s):  
Interest Rates ◽  
Optimization Model ◽  
Cost Optimization ◽  
Financing Cost ◽  
Funding Sources ◽  
Credit Line ◽  
Planning Models ◽  
Financing Costs ◽  
The Cost

The main aim of this research is to introduce financing cost optimization and different financing alternatives. There are many studies about financing cost optimization. All previous studies considering the cost of financing have many shortcomings, some considered only one source of financing as a credit line without taking into account different financing alternatives. Having only one funding alternative powers, restricts contractors and leads to a very specific financing model. Although it is beneficial for the contractor to use a long-term loan to minimize interest charges and prevent a substantial withdrawal from his credit line, none of the existing financial-based planning models have considered long-term loans in their models or included a schedule of borrowed money and a repayment schedule with interest rates. The aim of this study is not only to eliminate the shortcomings of previous studies but also to incorporate a financing optimization model for various funding alternatives available to contractors in terms of funding sources and forms, cash provision times, interest rates and repayment options. This work proposes a financing optimization model, not only to remove the limitations but also to find optimal financing costs while offering the financing schedule without increasing the project duration and adjusting the starting times of the activities.

scholarly journals Assessing the Cost of Network Simplifications in Long-Term Hydrothermal Dispatch Planning Models

2021 ◽  
pp. 1-1
Author(s):  
Andrew Rosemberg ◽  
Alexandre Street ◽  
Joaquim Dias Garcia ◽  
Davi Michel Valladao ◽  
Thuener Silva ◽  
...  
Keyword(s):  
Planning Models ◽  
The Cost

scholarly journals Motivation, Dilemma and Countermeasures of Foreign Bond Financing of Real Estate Enterprises?Based on Perspective of Financial Internationalization

2020 ◽  
Vol 3 (5) ◽  
Author(s):  
Yasai Liu
Keyword(s):  
Sustainable Development ◽  
Real Estate ◽  
Real Estate Market ◽  
Financing System ◽  
Real Estate Enterprises ◽  
Financing Channels ◽  
Financing Costs ◽  
Financial Internationalization ◽  
The Cost

Several real estate enterprises in China (hereinafter referred to as housing enterprises) rely on overseas financing to meet their financing needs, but it is fraught with challenges such as high financing costs. Premised on the internationalization of finance, combined with the background of "staying and not speculating" and establishing a long-term mechanism for real estate market, based on the investigation of the financing motives of real estate enterprises, combined with a large amount of data, the present study examines the current situation and predicament of overseas financing of housing enterprises. It proposes four feasible countermeasures to promote sustainable development of real estate enterprises overseas financing including building a special financing system to reduce the cost, expanding various financing channels, strengthening the supervision of overseas bond financing, and reducing the loss devaluation of RMB internally and externally.

The Evolution and Importance of Public Credit

2011 ◽  
Author(s):  
David Stasavage
Keyword(s):  
Interest Rates ◽  
Early Modern Europe ◽  
Access To Credit ◽  
Public Credit ◽  
The Difference ◽  
City States ◽  
The Cost ◽  
Territorial States ◽  
New Evidence

This chapter examines why access to credit was important for European states and provides extensive new evidence on the evolution of public credit across five centuries, from 1250 to 1750. The ability to borrow was critical in medieval and early modern Europe because it allowed states to participate in wars, either defensive or offensive. In order to better understand this fact, the chapter analyzes the movement that took place from compulsory to paid service for soldiers, along with opportunities to finance wars through current taxation. It also explains when states first borrowed long-term and measures the cost of borrowing, focusing on interest rates based on nominal rates at issue when these are available, and based on the fiscal proxy when they are not. The chapter highlights the difference between city-states and territorial states, with the former enjoying an apparent financial advantage that allowed them to begin borrowing earlier and to obtain access to lower-cost finance.

scholarly journals Guaranteed Annuity Options

2003 ◽  
Vol 33 (02) ◽  
pp. 125-152 ◽  
Author(s):  
Phelim Boyle ◽  
Mary Hardy
Keyword(s):  
Interest Rates ◽  
Insurance Companies ◽  
Retirement Savings ◽  
Fixed Rate ◽  
Life Annuity ◽  
Stock Market Performance ◽  
New Business ◽  
The Difference ◽  
The Cost

Under a guaranteed annuity option, an insurer guarantees to convert a policyholder's accumulated funds to a life annuity at a fixed rate when the policy matures. If the annuity rates provided under the guarantee are more beneficial to the policyholder than the prevailing rates in the market the insurer has to make up the difference. Such guarantees are common in many US tax sheltered insurance products. These guarantees were popular in UK retirement savings contracts issued in the 1970's and 1980's when long-term interest rates were high. At that time, the options were very far out of the money and insurance companies apparently assumed that interest rates would remain high and thus that the guarantees would never become active. In the 1990's, as long-term interest rates began to fall, the value of these guarantees rose. Because of the way the guarantee was written, two other factors influenced the cost of these guarantees. First, strong stock market performance meant that the amounts to which the guarantee applied increased significantly. Second, the mortality assumption implicit in the guarantee did not anticipate the improvement in mortality which actually occurred. The emerging liabilities under these guarantees threatened the solvency of some companies and led to the closure of Equitable Life (UK) to new business. In this paper we explore the pricing and risk management of these guarantees.

The cost and value of UK defined benefit pension provision

2007 ◽  
Vol 7 (1) ◽  
pp. 3-36 ◽  
Author(s):  
PAUL SWEETING
Keyword(s):  
Interest Rates ◽  
Similar Pattern ◽  
Income Tax ◽  
Additional Cost ◽  
Defined Benefit ◽  
Pension Schemes ◽  
National Insurance ◽  
The Cost ◽  
Pension Benefits

SUMMARYThe purposes of this paper are to consider the effect on remuneration of defined benefit pension accrual and the factors that have resulted in changes to the cost and value of this accrual. In this paper, I look at the effect of the change in the cost to an employer of providing a defined benefit pension on the overall cost of remunerating an employee and compare that with the cost of remunerating an employee with no such pension benefits. I allow for the additional cost to the employer of national insurance contributions (‘NICs’). I also look at the change in value of an employee's remuneration, taking into account the value of defined benefit pension accrual and compare this with the change in remuneration for an employee with no such benefits. Here, I allow for employee national insurance contributions and income tax. These assessments look at the cost and value of pension accrual rather than any surplus or deficit relating to previously accrued pension entitlements. I find that costs of employment have risen significantly more for members of defined benefit pension schemes compared with other employees, and that this has largely been as a result of falling long-term interest rates and their effect on the cost of defined benefit pension accrual. The increase in the value of remuneration to employees has shown a similar pattern.

scholarly journals Guaranteed Annuity Options

2003 ◽  
Vol 33 (2) ◽  
pp. 125-152 ◽  
Author(s):  
Phelim Boyle ◽  
Mary Hardy
Keyword(s):  
Interest Rates ◽  
Insurance Companies ◽  
Retirement Savings ◽  
Fixed Rate ◽  
Life Annuity ◽  
Stock Market Performance ◽  
New Business ◽  
The Difference ◽  
The Cost

Under a guaranteed annuity option, an insurer guarantees to convert a policyholder's accumulated funds to a life annuity at a fixed rate when the policy matures. If the annuity rates provided under the guarantee are more beneficial to the policyholder than the prevailing rates in the market the insurer has to make up the difference. Such guarantees are common in many US tax sheltered insurance products. These guarantees were popular in UK retirement savings contracts issued in the 1970's and 1980's when long-term interest rates were high. At that time, the options were very far out of the money and insurance companies apparently assumed that interest rates would remain high and thus that the guarantees would never become active. In the 1990's, as long-term interest rates began to fall, the value of these guarantees rose. Because of the way the guarantee was written, two other factors influenced the cost of these guarantees. First, strong stock market performance meant that the amounts to which the guarantee applied increased significantly. Second, the mortality assumption implicit in the guarantee did not anticipate the improvement in mortality which actually occurred.The emerging liabilities under these guarantees threatened the solvency of some companies and led to the closure of Equitable Life (UK) to new business. In this paper we explore the pricing and risk management of these guarantees.

scholarly journals Research on Property Rights, Revenue Transparency and Equity Financing Costs——Based on the Perspective of CEO Overconfidence

2019 ◽  
Vol 1 (1) ◽  
Author(s):  
Jin Luo
Keyword(s):  
Property Rights ◽  
Negative Impact ◽  
Mediating Effect ◽  
Cost Of Equity ◽  
Equity Financing ◽  
Impact Mechanism ◽  
Financing Cost ◽  
Financing Costs ◽  
The Cost ◽  
The Impact

[Abstract] This paper takes the Chinese listed company with the equity refinancing qualification from 2012 to 2013 as the research object, and uses the residual revenue model to calculate the equity financing cost. This paper discusses the impact of the overconfidence of executives on the equity financing cost and its impact mechanism. The unique institutional background examines the differences in property rights characteristics. The research found that: (1) executive overconfidence has a negative impact on the cost of equity financing, executives tend to be overconfident, the higher the equity financing cost of the company; (2) the overconfidence of executives to state-owned enterprises compared to private enterprises The negative impact of financing costs is more significant; (3) in addition, this paper also examines the potential impact mechanism of executive overconfidence on the cost of equity financing. The quality of information disclosure and the risk of investor prediction have a mediating effect on the impact of executive overconfidence on equity financing costs.

scholarly journals The Issues and Implications About the Volatility of the Stock and the Bond Prices and Their Returns and the Volatility of Interest Rates and Inflation - Which Are Being Researched in Finance and Macro-Monetary Economics Literature: A Survey

2018 ◽  
Vol 5 (2) ◽  
pp. 125 ◽  
Author(s):  
Muthucattu Thomas Paul
Keyword(s):  
Interest Rates ◽  
Stock Returns ◽  
Futures Markets ◽  
Relevant Literature ◽  
Aggregate Demand ◽  
Monetary Economics ◽  
Short Term ◽  
Expected Return ◽  
The Cost

Volatility of returns of the financial assets, and the volatility of the inflation and aggregate demand, are important issues in the Financial markets, and the macro- monetary economics. In this article, the volatility in the stock and bond markets are surveyed and discussed in detail. Our view is that the higher volatility in the long-term rates than in the short-term rates, may be due to the higher leverage effect in the long-term markets and rates than in the short -term rates. In the previous century, last fifty years, the average stock returns were much higher and the expected return or the cost of capital was lower. The conditional volatility models and the volatility spill over between the spot and futures markets and their implications are deeply explored in this article along with the price discovery between spot and futures markets and the conditions for the efficiency in these markets. In our section dealing with Macro- monetary economics, the effect of the variability of inflation on the demand for money function, on the nominal rates of interest, and on the slope of the aggregate supply curve, are brought into sharp focus and is being discussed through the relevant literature survey.

scholarly journals THE ASSESSMENT OF THE EFFICIENCY OF MANAGEMENT FUNCTIONS OUTSOURCING

2021 ◽  
Author(s):  
Ludmila Chiz ◽  
Natalia Khotyeyeva
Keyword(s):  
Economic Effect ◽  
Cost Optimization ◽  
Risk Allocation ◽  
Successful Model ◽  
Definition Of ◽  
Tax Reporting ◽  
Management Functions ◽  
The Cost

The view of the outsourcing process differs significantly includes not only the classical view of outsourcing as the transfer of traditional non-key functions of the organization to external contractors, but also long-term transfer of management functions and, if necessary, available resources to external contractors. A successful model of effective business, that allows to gain competitive advantage, may include outsourcing management functions. According to some economists, the motives for outsourcing certain functions are the cost and quality of the product, and the possible loss of control over the business is not a first-rate factor. Systemic cost optimization addresses the problem of costs that can be avoided. It should be noted that the indicator on which the consumer of outsourcing services should focus is the economic effect. The process of transferring accounting functions to another company is not suitable for the classical definition of outsourcing. In practice, the most common types of outsourcing of management functions are accounting and tax accounting, legal support, maintenance of information systems. There are different ways to can quantify the efficiency of accounting outsourcing, including a cost approach. The most important advantage of accounting outsourcing in the strategic aspect is the ability to share risk. Financial or tax reporting outsourcing is primarily a matter of risk allocation, so the assessment of the efficiency of this type of outsourcing should be developed from this standpoint. A successful model of effective business can use outsorcing. It is important that especially during the busines development in the market, the company can not perform well on certain production processes and some management functions or sometimes lacks the means to ensure this process or function. When transferring non-key functions to external organizations, it is difficult to identify key processes that are strategically important for the company. Separating the accounting process into components and outsourcing only individual processes reduces the level of risk.

scholarly journals Collaborative Distribution in the Soft Time Window of Agricultural-Means Supply Chain Based on Simulated Annealing-Genetic Algorithm

2020 ◽  
Vol 53 (6) ◽  
pp. 835-844
Author(s):  
Yanxin Zhu ◽  
Jiajing Wang ◽  
Meiyu Li
Keyword(s):  
Genetic Algorithm ◽  
Supply Chain ◽  
Simulated Annealing ◽  
Customer Satisfaction ◽  
Optimization Model ◽  
Time Window ◽  
Cost Optimization ◽  
Simulated Annealing Genetic Algorithm ◽  
Appointment Time ◽  
The Cost

This paper mainly explores the collaborative distribution to multiple customers at the terminal of agricultural-means supply chain (AMSC). Firstly, a cost optimization model for collaborative distribution constrained by time window was constructed based on fuzzy appointment time function. Next, the proposed model was solved by simulated annealing-genetic algorithm (SA-GA). Through a case study, the cost optimization model constrained by customer satisfaction was compared with that not constrained by customer satisfaction. The results show that the cost optimization model constrained by customer satisfaction made the customers more satisfied without greatly elevating the distribution cost. The research results shed new light on the collaborative distribution of time-sensitive agricultural-means (AM) products, and the management of the AMSC.

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