能源资产中的长期投资在不确定性条件下的估值外文翻译.docVIP

外文翻译 原文 Valuation of Long-Term Investments in Energy Assets under Uncertainty Material Source: Energies Author: Luis M. Abadie 1. Introduction When investing in energy assets, either revenues or costs or both of them depend on the quantities of commodities produced and consumed. Commodities prices are typically established in spot and futures markets. These prices and other issues1 are subject to uncertainty, which renders the valuation model particularly important. A faulty assessment of uncertainty can lead to wrong investment decisions. Thus,using a (unduly) higher risk premium can push managers to reject (relatively) less risky investments; and using a (unduly) lower risk premium can push them to accept (relatively) more risky investments. In order to value these investments, a number of traditional methods are usually adopted. Among them we can mention the life-cycle cost analysis, simple or discounted payback, benefit cost analysis(BCA), net present value (NPV) and internal rate-of-return (IRR). The life-cycle cost analysis computes the discounted costs of construction, acquisition, maintenance and operation over a period of time. The payback period is the number of years until revenues exceed the initial disbursement. These methods, however, typically fail to grapple with the project’s uncertainty in a satisfactory way.Besides, they make little or no use of spot and futures prices. Nonetheless, a model developed from the NPV, as the one in this paper, can correctly cope with uncertainty in the absence of flexibilities or options. McDonald analyzes to what extent rules of thumb such as payback and hurdle rates can approach the true value of an investment regarding projects with options under uncertainty. But this would be more appropriate in the case of small firms according to Graham and Harvey; as they show, both the IRR and the NPV are used very frequently. These methods are even the most used methods, despite the supremacy that the c