...Lomond Power Q1. For this captive mine power plant, what contract structures would you expect to see in the Power Purchases Agreement? (From the perspective of Lomond Power) The Power Purchases Agreement should cover the following items to make the certainty of the contract to mitigate the market risk. Term: the project’s output is only sold to one offtaker, Maud Gold Mine. The strength of offtaker and its technical or strategic are assessed. The term of PPA is based on the life of Maud’s Gold Mine. Hence, the term of the contract is 12 years. The condition and amount about bonuses and penalties should be including in the PPA. Project Date: commencement and completion date. This also includes the transition during commissioning. Quantity of the product: since App proposes to use an LM6000 aeroderivative gas turbine packages which can produce 32-36MW from the S&S package. The capacity assurance S&S guaranteed the 95% availability Price & Payment: the price should also be included in the Power Purchase Agreement to mitigate the market risk. And the payment method should also be included, such as: ESA or annuity. Security and default: If completion is not achieved by a fall-out date, then completion guarantees and other supports may be triggered by a default. If fail to pay the interest and repay the debt, then legal security may be exercised. The financiers have right to get indemnity from the delay-in-startup and liquidated damages insurances. Risk taker: the PPA should...
Words: 1225 - Pages: 5
...Project Finance By Godfred Kwame Abledu Abstract Project financing is largely an exercise in the equitable allocation of a project’s risks between the various stakeholders of the project. Indeed, the genesis of the financing technique can be traced back to this principle. Roman and Greek merchants used project financing techniques in order to share the risks inherent to maritime trading. A loan would be advanced to a shipping merchant on the agreement that such loan would be repaid only through the sale of cargo brought back by the voyage (i.e. the financing would be repaid by the ‘internally generated cash flows of the project’, to use modern project financing terminology). The purpose of this paper therefore is to provide an overview of Project Finance. The paper touched on the Motivation for the increased reliance on project financing to fund investments, advantages that project finance has over traditional corporate finance, the major short-comings of project finance and a typical project finance transaction. Table of Contents Assignment 1 1 Abstract 2 A. Introduction 4 B. Why is project financing being increasingly relied on to fund investments? 4 C. What advantages does it have over traditional corporate finance? 6 D. What are the major short-comings of project finance? 7 E. Typical Project finance Transaction 8 References 10 A. Introduction Unlike the traditional loan arrangements, project finance is a financial structure which facilitate the arrangements...
Words: 2029 - Pages: 9
...Please make sure you have the correct answers to your Week 6 Finance Project. I will be looking for these numbers when grading your work. 1. Explain how much additional money you would need to add to your monthly payment to pay off your loan in 20 years instead of 25. The principle = $112,242.47, the interest rate = 5.75%, loan period = 20 years. You should be able to compute the new monthly payment based on these numbers. Then the new monthly payment - the current monthly payment gives the additional amount of money. You may ignore the escrow payment $211.13 and the total payment $917.25 for this project. 2. Explain whether or not it would be reasonable to do this is if you currently meet your monthly expenses with less than $100 left over. Use the answer from part 1 to explain. You earn the points as long as your arguments make sense. 3. It might be possible to pay the current balance off in 20 years if you refinanced the loan at a lower interest rate. The interest rate that you qualify for will depend, in part, on your credit rating. Identify the highest interest rate you could refinance at in order to do this and determine the interest rate that would require a monthly total payment that is less than your current total payment. Also, refinancing costs you $2000 up-front in closing costs. The principle = $112,242.47, loan period = 20 years. You are looking for the highest interest rate (it is lower than 5.75% of course) which makes your monthly payment...
Words: 394 - Pages: 2
...International Project Finance Globalization, large scale production and chains of multinationals have become very common in today’s world. Due to this, any business that has to survive and compete with others on a global level has to come up with new and innovative projects to give it an edge above its competitors. Here, we are not talking about projects on a small or medium scale. We are talking about huge multimillion dollar investments in a large scale project as only then can a business make its mark on the world economy. The main cause of people hesitating to do such huge projects is that they do not have enough financial back up to go through with plans involving such huge investments. Since, in the end, every brilliant project plan is dependent on the finance required to carry it through, financing of such a project becomes the primary concern of any planner. The financing must be done prudently so that the best of the financial instrument can be used while the negatives avoided as far as possible. Every financial instrument is applicable for certain projects. Choosing such instrument should be the focus of any project since the project will only remain on paper and never be carried out unless there is financial aid. In the present day, there are many unique financial law solutions for funding large scale projects. Following are some of them described in brief: * Project Finance Loans: Project Finance is a kind of loan structure wherein the repayment is dependent...
Words: 6674 - Pages: 27
...Project Finance Module NATIONAL STOCK EXCHANGE OF INDIA LIMITED Dtp-Sys-9\D:\F\2012\F-902-12-Project_Finance/F-902-12-Project_Finance.indd Test Details: Sr. No. Name of Module Fees (Rs.) Test Duration (in minutes) No. of Questions Maximum Marks Pass Marks (%) Certificate Validity 1 Financial Markets: A Beginners’ Module * 1686 120 60 100 50 5 2 Mutual Funds : A Beginners' Module 1686 120 60 100 50 5 3 Currency Derivatives: A Beginner’s Module 1686 120 60 100 50 5 4 Equity Derivatives: A Beginner’s Module 1686 120 60 100 50 5 5 1686 120 60 100 50 5 1686 120 60 100 50 5 7 Interest Rate Derivatives: A Beginner’s Module Commercial Banking in India: A Beginner’s Module Securities Market (Basic) Module 1686 120 60 100 60 5 8 Capital Market (Dealers) Module * 1686 105 60 100 50 5 9 Derivatives Market (Dealers) Module * 1686 120 60 100 60 3 1686 120 60 100 60 5 1686 120 60 100 60 5 12 FIMMDA-NSE Debt Market (Basic) Module Investment Analysis and Portfolio Management Module Fundamental Analysis Module 1686 120 60 100 60 5 13 Financial Markets (Advanced) Module 1686 120 60 100 60 5 14 Securities Markets (Advanced) Module 1686 120 60 100 ...
Words: 33608 - Pages: 135
...MG 670 Finance Term Project Click Link Below To Buy: http://hwcampus.com/shop/mg-670-finance-term-project/ MG 670 Finance Term Project Company : Costco and Walmart MG 670 Finance Term Project Guidelines There is a lot to be said for valuing a company, it is no easy task. If you have yet to discover this moneymaker, the satisfaction one gets from tearing apart a company’s financial statements and analyzing it on a whole different level is great – especially if you make or save yourself money for your efforts. In this project, you will analyze the fundamental financial ratios. The ratios should be presented in a simplified manner to make them easier to understand. Sure some of the ratios have different varieties, but by the end you will understand the basic premise and reasons for fundamental analysis. You will work in groups of three or four people for this project. You will be analyzing two public traded companies within the same industry; as well, you will also evaluate these companies against their industry standards for performance. To find the data for your ratio analysis, you will need each company’s latest financial figures. Finding these financial reports can done by searching the internet through some of these sources, but not limited to: • Company Websites – Almost every public company has a website or investor relations department. For the most current quarterly or annual report you might want to check in these places first. Walt Disney is an excellent...
Words: 1538 - Pages: 7
...This report will present a discussion on the financial challenges and issues based on the Ruritanian Project case study. The report is concerned with analyzing the investment environment of the host nation, maximizing the investment return and minimizing the risks which could have a negative impact on the financial performance of the Ruritanian project. Firstly, the national economy environment will be discussed based on the national GDP growth and inflation rate; secondly, there is a discussion on the foreign exchange risks of Rutitania Crown against international currency; third, the issue of joining the Euro zone will be analyzed in terms of benefits and drawbacks; next, the taxation effect in the investment decision making will be accessed and finally there will be a discussion on the political environment. THE NATIONAL ECONOMY AND THE IMPLICATIONS FOR THE PROJECT 2.1 The Relationship between National Economy and the Foreign Direct Investment (FDI) The economic growth of the host nation has always had a positive relationship with the foreign direct investment decision making. The positive effect of host country economic growth on investment decision making has been supported by various studies (Ericsson and Irandoust, 2000; Dhakal, Kamal and Upadhyaya, 2007; Barrell and Pain, 1996; Grosse and Trevino, 1996; Taylor and Sarno, 1999; Trevino et al., 2002). Traditionally the economic growth of the host nation induces FDI inflow when FDI is seeking consumer markets, or when...
Words: 4204 - Pages: 17
...ISLAMIC PROJECT FINANCE AND PRIVATE FUNDING SCHEMES INTRODUCTION From Islamic perspective there is no objection to such private provision (private sector companies) but there is always involve Shariah compliance issues. There is borrowing on the basis of riba is haram. The adoption of Islamic financing techniques such as istisna can avoid such difficulties and discounting of future income is seen as legitimate by Islamic economist. This technique can be used to calculate for social rate of return in Muslim societies. Increased knowledge can reduces uncertainty involved in any project but it will take time to reach the fruition. The modern techniques of project appraisal can be used by Islamic financial institutions and if there is commercial funding method that gives the appropriate needs and circumstances of Muslims countries and communities. As raise the private sectors, good information flow is important for the project to be properly evaluated. The issue of discounting is potentially causes problems from the perspective of Shariah. Discounting rate is equated with interest rate which constitutes riba. It also useful tool if the decision on the merits of different projects are to be made on the basis of comparison from their present value. Such the calculations enhance the knowledge of decision makers. Islamic financing instruments are used to replace the interest-based borrowing and to ensure the financial arrangements are efficient. 2. State arrangement of project...
Words: 3173 - Pages: 13
...1. The Fund | 1.1 Fund Name RBC Emerging Markets Equity A 1.2 Stars MORNINGSTAR GLOBENEWS 1.3 Fund Category Emerging Markets Equity1.4 Total Assets $ 115 million1.5 MER 2.43%1.6 Mgmt. Fee 1.85%1.7 Portfolio Manager Philippe Langham is Head, EmergingMarkets Equities & Senior Portfolio Manager. He has worked in theinvestment industry since 1992 and in 2009 joined the firm toestablish and lead the team that manages RBC Emerging MarketsEquity Fund. Philippe is a graduate of the University of Manchesterin England, where he earned a Bachelor’s degree in Economics. Heis also a qualified Chartered Accountant.1.7 Third-Party Report http://www.bing.com/search?q=RBC+Emerging+Markets+Equity+A&go= Submit&qs=n&form=QBRE&pq=rbc+emerging+markets+equity+a&sc=6-29&sp=1&sk=&cvid=227F141683284B8BB9C2E7AC5AB450A0 | 2. The Fund Company | 2.1 MF Company RBC Global Asset Management Inc2.2 Stewardship Grade A2.3 Assets Under Mgmt. $2,344.8 million2.4 Ranking by Size: 45 2.5 Number of funds under the company 191 | 3. Fund Objectives | 3.1 Fund ObjectivesTo provide long-term total returns consisting of dividend income and capital growth. The fund invests primarily in equity securities of companies located or active in emerging markets with above average dividend yields.3.2 Fund Benchmark MSCI EM GR CAD 3.3 SRI No3.4 Fund Style- Giant in size- High Returns- Long-term growth | 4. Fund Risk and Return | Time Frame...
Words: 658 - Pages: 3
...Spring 2014 Principles of Finance Final Project General Motors Company vs Ford Motor Company Lauren Grippo GENERAL MOTORS CORPORATION (COMPANY) General Motors Corporation (General Motors or GM) was incorporated on August 11, 2009. Also known as GM, the company designs, builds and sells cars, trucks and automobiles parts globally and headquartered in Detroit, Michigan. The company also provides automotive financing services through General Motors Financial Company, Inc. (GM Financial). The company designs, manufactures and markets vehicles under the brands of Buick, Cadillac, Chevrolet and GMC. Along with our strategic partners, we produce cars and trucks, and sell and service our vehicles, through the following brands: Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling (GM.com). In addition to the products the company also sells to its dealers for consumer retail sales, to fleet customers, including daily rental car companies, commercial and leasing companies and governments. As of December 31, 2012, the Company offered 21 FlexFuel vehicles in the United States and offered 12 hybrid models and continues to develop plug-in hybrid electric vehicle technology. They are also subsidiary owners of the OnStar, LLC servicing the United States and Canada. OnStar is a provider of connected safety, security and mobility solutions and advanced information technology. FORD MOTOR COMPANY The Ford Motor Company (also known as Ford) is an...
Words: 3240 - Pages: 13
...Resource Markets WP-RM-18 Recent Developments in Transaction Cost Economics Sophia Ruester January 2010 Chair for Energy Economics and Public Sector Management Electronic copy available at: http://ssrn.com/abstract=1535903 Recent Developments in Transaction Cost Economics Sophia Ruester1 Abstract This working paper provides a summary on transaction cost economics (TCE) and recent developments thereof. After an introductory discussion of TCE’s role within the field of New Institutional Economics, a critical analysis of the contribution of the existing body of empirical literature is conducted. In recent years, researchers have continued to develop and extend TCE. Williamson (1991b) introduces the shift parameter framework which investigates how the optimal choice of governance changes in response to dynamics in the institutional environment. Nickerson (1997) develops the positioning-economizing perspective arguing that decisions regarding market position, resource investments, and governance mode are interdependent and determined simultaneously. A number of authors came up with an increasing interest in relational institutional arrangements arguing that TCE may overstate the desirability of complex long-term contracts and vertical integration in exchange settings where a substantial hold-up potential is present. JEL Codes: Keywords: D23, L22 Transaction cost economics, discriminative alignment, theories of the firm, shift parameter framework, positioning-economizing...
Words: 20511 - Pages: 83
...Financial Project Five years ago I bought a house for $171,000. I made a down payment of $35,000 therefore taking out a loan for $136,000. I am now five years into a 30 year loan that has a 5.6% fixed interest rate and would like to pay more. After receiving a bank statement I found I have a $121,259.44 balance left on my loan. I have been thinking about switching jobs or picking up a part time job since I am just making enough money to cover my expenses and I want to pay off my loan faster. I have also given thought to refinancing my house and whether it is worth it. Is paying a little extra monthly, therefore reducing my loan by five years (option 1), worth it? Should I refinance instead (option 2)? I did my research and what I found surprised me. Currently I have twenty five years left on my mortgage but I would like to pay it off in twenty. Since I am tight on money I had to find exactly how much extra money I would need to pay every month to shorten my loan to 240 payments or twenty years. If I pay an extra $90 a month towards my principle, I will shorten my loan to twenty years and save about $23,914 in interest. This is very reasonable because before I would have paid about $104,310 solely in interest over the remaining life of the loan. I believe it is a waste to pay so much of the loan directly towards interest, by paying an extra $90 per month I am able to drop this total interest to about $80,397. I can easily see myself working couple hours a week to pay this...
Words: 730 - Pages: 3
...Modelo CAPM para inversión a largo plazo. No es para el mercado peruano. Supuestos: * Que el mercado de capitales es desarrollado, liquido y profundo. Nuestro mercado tiene pocos ofertantes y demandantes. * El uso del beta implica que se puede usar el CAPM, ojo aquí en el Perú no se puede. El Beta es el coeficiente de variación de una acción respecto a un portafolio (grado de sensibilidad). * Los inversionistas son racionales, eso implica que ante la posibilidad de asumir un nivel de riesgo van a escoger la acción de mayor rentabilidad. * Supone información perfecta, todos saben lo mismo al mismo momento * Se puede aplicar en USA La tasa libre de riesgo no la voy a buscar en las acciones, sino en las obligaciones. Dentro de las obligaciones las de largo plazo (T. Bonds) tienen mas riesgo que las de corto plazo (T. Bills). Todo tiene riesgo, para selección la tasa libre de riesgo, también debo considerar el riesgo de reinversión que si esta asociada a las obligaciones de corto plazo. Entonces debo tomar las obligaciones a largo o corto plazo? Damodaran toma las obligaciones de largo plazo. Que usar de referencia? Para escoger el beta veo si tengo datos, si los tengo, yo mismo los hago. El riesgo país se mide por diferencia de los ADRs, o por diferencial de los bonos del tesoro entre países. Damodaran, menú izquierda Updated data, ten Discount rate. Historical rates on returns. Usamos los tbills y usar el promedio geométrico, pero el que mas se usa...
Words: 256 - Pages: 2
...Retail gasoline prices fluctuate mainly because of crude oil prices and the level of supply relative to demand. Because of the strong and increasing demand for gasoline in the U.S. and throughout the world, there is a limited supply which increases the price of gas. Prices usually rise slightly in the spring and peak in late summer when people drive more and then drop in the winter. According to the EIA, good weather and vacations cause U.S. summer gasoline demand to average about 5% higher than the rest of the year, causing gas prices to increase by 10-20 cents from January to the end of summer. Crude oil prices are determined by worldwide supply and demand which is why as countries around the world develop rapidly, the demand for and price of gas increases rapidly. Natural disasters and Political conflicts in major oil producing regions such as Saudi Arabia, Iran and Iraq can also affect the price of gas. The Organization of Petroleum Exporting Countries (OPEC) also has significant influence over the price of crude oil because its members produce over 40% of the world’s supply of oil and own more than two-thirds of the world’s estimated oil reserves. Because OPEC members want to maximize their profits, it is often in their best interest to limit the production level as much as possible. States further away from the Gulf Coast (where almost half of the gasoline in the U.S. is produced) tend to have higher oil prices because they are also paying for the cost of transporting the...
Words: 660 - Pages: 3
...A Project Report on “WORKING CAPITAL MANAGEMENT” In SUJANA METAL PRODUCTS LTD. Hyderabad. Submitted in partial fulfillment of the Requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION BY SUMAN NEELI Under the Guidance of Mr. K. SATISH Asst. Manager (F & M) [pic] DEPARTMENT OF MANAGEMENT STUDIES INDIAN INSTITUTE OF PLANNING MANAGEMENT BANJARAHILLS, HYDERABAD. 2010 – 2012 INDIAN INSTITUTE OF PLANNING MANAGEMENT BANJARAHILLS, HYDERABAD. DEPARTMENT OF MANAGEMENT STUDIES [pic] CERTIFICATE This is to certify that the project titled WORKING CAPITAL MANAGEMENT is being submitted by SUMAN NEELI partial fulfillment for the award of the degree of MASTER OF BUSINESS ADMINISTRATION (MBA) is record bonafide work carried by him. The results embodied in this report have not been submitted to any other university for the award of any degree. ACKNOWLEDGEMENT With immense pleasure and deep sense of gratitude, I express my indebtedness to my project guide Mr. K. SATISH for giving good guidance and keen interest in the progress of the work. I am also thankful to Laxmi Prasanna (Accounts & Finance Department) SUJANA METAL PRODUCT LTD in Hyderabad for giving me permission to undertake the study in the Organization and he providing required sources for completion of my project. I am thankful to …………. I am also express my great sense of gratitude to my beloved parents and my friends who...
Words: 13482 - Pages: 54
