Risk Analysis in Investment Appraisal

The methodology and uses of Monte-Carlo simulation technique are presented as applied to the analysis and assessment of risk in the evaluation of investment projects. The importance of risk analysis in investment appraisal is highlighted and the stages in the process introduced. The results generated by a risk analysis application are interpreted, including the investment decision criteria and measures of risk based on the expected value concept. Conclusions are drawn regarding the usefulness and limitations of risk analysis in investment appraisal.risk analysis; investment appraisal; Monte Carlo simulation; project evaluation; measures of risk; investment decision criteria

Risk Analysis in Investment Appraisal

This paper was prepared for the purpose of presenting the methodology and uses of the Monte Carlo simulation technique as applied in the evaluation of investment projects to analyse and assess risk. The first part of the paper highlights the importance of risk analysis in investment appraisal. The second part presents the various stages in the application of the risk analysis process. The third part examines the interpretation of the results generated by a risk analysis application including investment decision criteria and various measures of risk based on the expected value concept. The final part draws some conclusions regarding the usefulness and limitations of risk analysis in investment appraisal.Risk Analysis; Monte Carlo simulation; Investment appraisal; Project analysis; Forecasting and simulation; Business administration

Private Debt is the Problem!

Cyprus suffers from a developing acute case of Balance Sheet Recession. This means that because of the excessive and quite unprecedented levels of private debt (3 to 4 times the size of the country’s GDP) weighing on households and corporations, it is practically impossible for the country to overcome the recessionary effects of the austerity conditions that were imposed since the bail-in in 2013 and which still constitute the core of the Government policy. The article concludes that therefore the government should stand ready to have in place the institutions and provide for such fiscal measures which will mitigate and cushion the deflationary effects of the coming, but very foreseeable, recession

Private Debt is the Problem!

Cyprus suffers from a developing acute case of Balance Sheet Recession. This means that because of the excessive and quite unprecedented levels of private debt (3 to 4 times the size of the country’s GDP) weighing on households and corporations, it is practically impossible for the country to overcome the recessionary effects of the austerity conditions that were imposed since the bail-in in 2013 and which still constitute the core of the Government policy. The article concludes that therefore the government should stand ready to have in place the institutions and provide for such fiscal measures which will mitigate and cushion the deflationary effects of the coming, but very foreseeable, recession

Policy Should Focus on the Need to Overcome Private Indebtedness

The author emphasizes the need to address private indebtedness as the main cause of the problem which manifests itself in a huge amount of non-performing loans following the bail-in of deposits of 2013. The focus should not be on how to compensate depositors or bond holders or even shareholders of the affected banks. It should be on how the over-indebted businesses and households can lighten their debt burden and be in a position to engage in normal economic activity in a stable and sustainable manner

Policy Should Focus on the Need to Overcome Private Indebtedness

The author emphasizes the need to address private indebtedness as the main cause of the problem which manifests itself in a huge amount of non-performing loans following the bail-in of deposits of 2013. The focus should not be on how to compensate depositors or bond holders or even shareholders of the affected banks. It should be on how the over-indebted businesses and households can lighten their debt burden and be in a position to engage in normal economic activity in a stable and sustainable manner

Market Analysis and Competitiveness in Project Appraisal

The paper highlights the need for a methodological framework on which to base projections in project appraisal applications. Following an initial definition and sizing of the relevant market of the project, the market is analysed in terms of which are the main customer groups, what their needs are, and how well existing suppliers serve these needs. The process should identify market performance gaps against which the project can position itself and develop relevant market competencies so that it can be assessed to be capable of out-performing competitors in meeting market expectations in a sustainable manner. This should be the essence of any project appraisal. The analyst should seek to find those elements of competitiveness that are likely to make the project a successful enterprise in its market. The quantification part of this exercise should lead to the modelling and compilation of the cash flow projections. The projected numbers should be a reflection of the competitive analysis

Risk Analysis in Investment Appraisal

The methodology and uses of Monte-Carlo simulation technique are presented as applied to the analysis and assessment of risk in the evaluation of investment projects. The importance of risk analysis in investment appraisal is highlighted and the stages in the process introduced. The results generated by a risk analysis application are interpreted, including the investment decision criteria and measures of risk based on the expected value concept. Conclusions are drawn regarding the usefulness and limitations of risk analysis in investment appraisal

Funding Economic Development and the Role of National Development Banks - The Case of Cyprus

peer reviewedThe paper draws on previous research on Multilateral Development Banks (MDBs), Regional Development Banks (RDBs) and National Development Banks (NDBs). It examines the role of the Cyprus Development Bank (CDB), prior its privatisation in 2008, in the economic development of the country and, specifically, its intermediation of international finance from multilateral and regional development banks. In a neo-liberal setting, this function was subsequently undertaken by the commercial banks, which are however currently limited by a balance sheet fatigue, resulting from the excessive levels of private debt, as shown in this paper. Moreover, the commercial banks lack necessary elements in successfully executing this key role. They do not have the professional competence as well as the discipline and culture for executing such a highly demanding mission in the economy. Last but not least, and judging from the experience of the CDB it is imperative to have a totally independent and competent financing institution, which will lead by example. Further to the analysis of the current macroeconomic and institutional context in Cyprus, there is a void of institutional capacity to fund projects and offer valuable advice to state and private decision-making bodies on decisive development projects. This paper recommends the establishment of an NDB or a National Development Finance Agency (NDFA), and proposes an appropriate model

Hapln1b, a central organizer of the ECM, modulates kit signaling to control developmental hematopoiesis in zebrafish

During early vertebrate development, hematopoietic stem and progenitor cells (HSPCs) are produced in hemogenic endothelium located in the dorsal aorta, before they migrate to a transient niche where they expand to the fetal liver and the caudal hematopoietic tissue, in mammals and zebrafish, respectively. In zebrafish, previous studies have shown that the extracellular matrix (ECM) around the aorta must be degraded to enable HSPCs to leave the aortic floor and reach blood circulation. However, the role of the ECM components in HSPC specification has never been addressed. In this study, hapln1b, a key component of the ECM, was specifically expressed in hematopoietic sites in the zebrafish embryo. Gain- and loss-of-function experiments all resulted in the absence of HSPCs in the early embryo, showing that hapln1b is necessary, at the correct level, to specify HSPCs in the hemogenic endothelium. Furthermore, the expression of hapln1b was necessary to maintain the integrity of the ECM through its link domain. By combining functional analyses and computer modeling, we showed that kitlgb interacts with the ECM to specify HSPCs. The findings show that the ECM is an integral component of the microenvironment and mediates the cytokine signaling that is necessary for HSPC specification