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Int J Manag Finance 3 2 — Gaudard, L. View author publications. Therefore, we can say that sheltered employment centres that can meet their financial expenses with their main income can have optimal profitability, as once the profitability of these companies increases their financial risk decreases. Do we have investment alternatives? The results of the linear regression for panel data indicate that the ROA of sheltered employment centres is explained by the variable economic and financial crisis. This is a typical investment decision in a new technology or product when there is uncertainty about the product's long term or short lived lifecycle. The main target love lines quotes in hindi participants remained the same: top executives of financial companies.

ABSTRACT: This paper discusses the application of real options analysis for a project that is in the process of construction and was affected by a natural disaster. The use of the analytical method has become a way of thinking in making decisions that should be taught to business school students. The case in this paper is based on an MBA thesis at the University of Gadjah Mada that was intended as a showcase for application of real options to address real business problems.

It shows one of the strategies in mainstreaming disaster risk management in the business school that also what is schema of a table in database the needs of businesses in the disaster-prone country. Key words: Real optionsReal options,disaster risk managementdisaster risk management,business continuity planbusiness continuity plan,disaster responsedisaster response.

El uso del método analítico se ha convertido en una manera de pensar cómo la toma de decisiones debe ser enseñada what does the independent variable represent los estudiantes de escuelas de negocios. Este caso muestra una de las estrategias de incorporación de la gestión de riesgo de desastres en las escuelas de negocios que, de igual manera, responde a las necesidades de las empresas en países propensos a desastres.

Palabras clave: Opciones reales, gestión del riesgo de desastres, plan de continuidad de negocio, respuesta a desastres. Incorporación de la Gestión del Riesgo de Desastres a las Finanzas. DOI: Indonesia is an archipelago country with a population of more than million people, lying on the equator with more than 17, seventeen thousands islands, and a part of pacific ring of fire with many active volcanos These geographical, geological, hydrological, and demographical characteristics make Indonesia one of the countries most vulnerable to natural disasters such as earthquake, tsunami, volcano eruption, tornado, floods, draughts, wildfire, landslide, etc.

Such disasters have caused many casualties and economic damage. Statistics from the National Disaster Management Authority BNPB shows that in January alone, it recorded disaster events that what is the relationship between risk and return explain with the help of a graph 20 casualties and missing people,people have been displaced and 2, units of damaged homes. Moreover, despite its potential rich with natural resources, demography bonus, tourism destinations, etc.

Figure 2 shows the statistics of frequency of disasters from until January, It indicates that floods are the most frequent disaster All of these disasters undoubtedly cause a vast amount of economic losses, affecting the continuity of businesses and ultimately people's welfare. Losses caused by disasters undoubtedly affect business life and the economy. For those businesses located in a country that is vulnerable to disasters, investment decision making is becoming more complex.

A feasible investment could turn out be unfeasible when an unfavorable event such as a natural disaster occurs. However, it does not necessarily mean that the feasibility study conducted prior to the initiation of the investment project was wrong. A feasibility study of an investment project that used discounted cash flows method DCF is assuming that the decision environment is stable and fixed, yet we know that more often than not, that is not true.

What is frequently overlooked is to identify the management options also known as real options to shutdown, to expand, to change price, etc. This paper will address the application of the concept of financial reengineering for a disaster-risk-sensitive investment project, namely real options analysis, and specifically, shutdown options.

An illustrative business case 1 will showcase how to analyze available management options on a project, affected by a disaster during the middle of its life cycle. The management options available in this situation include the shutdown option, where the owner of the project has to decide whether to continue operation of the project until its planned life, or to terminate the project. The case presented in this paper is a joint research project between a student in the study program and the author.

A portion of the research was written as a thesis by the student 2demonstrating that the topic of disaster management can be incorporated with financial management concepts. This paper uses a business case to illustrate the decision making context to identify decision alternatives management options ; to select analysis tools to determine required data to perform the analysis; and to give recommendations on policy. The business case overviews a company operating a project that was hit by a disaster during the middle of the project's life, requiring changes to the underlying assumptions and estimates used in the feasibility study of the project.

Real options analysis using Monte Carlo simulation modelling what is the connect option on uber performed to select the best decision alternatives that the company's management had to make. To make a simulation model, we have to understand the decision-making context, such that simulated variables and decision variables are properly incorporated in the model.

The best simulation must first predetermine the alternatives in order to determine the best alternative. This results in a policy recommendation, and provides the ability to explain why such a recommendation is given. The reason for using a simulation model to solve such a business case in the MBA program is that it does not require students to be mathematicians nor to have to formulate the complex real problem using mathematical expressions.

With the help of simulation software such as Oracle Crystal Ball an add-in for Microsoft Excelstudents should be able to translate the real problems onto a spreadsheet and perform the simulation to analyze each decision alternative. The integration of DRM into MMUGM's curricula is carried out by several strategies; 1 introducing application of business concepts in core courses such as marketing management, operations management, financial management, and human resource and organization management to deal with disaster-related problems or the impact of a disaster on a business.

The application can be introduced by discussing relevant cases or by creating project assignments; 2 master thesis that takes a real disasterrelated business problem as the main theme. Result of the latter is more and more cases can be developed that can be utilized to enrich the first strategy. This paper mainly describes the second strategy implementation.

The author will show the structure of curricula in MM-UGM and identify courses that could be used to disseminate Disaster Risk Management concepts as well as to perform a comparison analysis of curricula in other study program at UGM that specifically deals with disaster management, namely Master of Disaster Management. The business case used in this paper is related to a highly sensitive disaster risk investment project.

This integrated approach requires understanding not only of financial management concepts but also knowledge why doesnt my dog like human food as marketing to measure market confidence index that leads to demand estimation after the disaster or recovery stagedisaster management how long the recovery plan will takeand economics price of the commodity, demand analysis, etc. The key theme of this case focuses on utilizing financial what is the relationship between elements and atoms techniques to resolve business problems.

These are perhaps the oldest methods used in today's modern financial world. The use of these methods always assumes that all factors being considered are fixed and certain; the cost of capital, estimates of cash flows, project investment's life, selling price, cost of inputs, etc. In the real world, these variables are often changing during the project's life. In addition, manager has several options a right or a privilege, not an obligation to change the value of the variables, for example terminating the project earlier due to unfavorable outcomes or bad situations.

In such a case, the manager alters the project's life; the project's life is no longer a fixed variable that cannot be changed. Such alternatives of decisions are called real options, and the method is called real options analysis see for example the definitions and examples in the standard financial management textbook of Brigham and Ehrhardt, There is actually infinite variation of real options.

The types of real options listed below are just a list of popular, frequently discussed, and modeled real options. Investment timing option. It is an option to start immediately or to postpone an investment project. By postponing, one could gather more information that eventually reduces the risk and losses. However, the consequences of the postponement may include higher cost of capital, more expensive inputs i.

Growth option or expansion option. After a successful investment, frequently firms eager to continue or to expand the existing investment. Examples include: increasing production capacity to take advantage market momentum higher demand ; diversifying existing product lines; expanding the market, etc. The growth option may be considered as a new investment when taking into account the new is 1 additive identity size, initial investment to expand, additional cost of capital that might change because of new financing strategy, and so on.

Contracting option. This is a typical investment decision in a new technology or product when there is uncertainty about the product's long term or short lived lifecycle. For example: instead of building one's own production facility a less risky alternative is to give the production order to another company. Flexibility option. Flexibility to change the design of a product or facility, its price, its feature, required inputs to produce it, etc. Shutdown option or abandonment option.

Suppose that in middle of the investment's life, an unfavorable event is taking place i. Careful consideration should be taken in employing this option as shutting down the business also means closing future opportunities. Many other types of real option and examples of modelling techniques can be found in the literature. See example in Mun and, Sipp and Carayannis Sipp and Caravannis consider the real options analysis in decision making as not only a method or technique, but also as a new paradigm in decision-making.

As a new paradigm, the decision making carried out by do i have a healthy relationship with food manager in an investment decision making is not merely practicing algebra of the DCF method i. Additionally he should execute the four-strategic theme outline by Bowman and Hurrynamely sensemaking, resource allocation, strategic positioning, and learning.

Sensemaking references managers attempt to make sense of and interpret past situations and utilize their intuitive beliefs to inform their future decisions. Resource allocation refers to the fact that firms invest in their business to maximize operating eftciencies and build competitive barriers. Strategic positioning refers to the fact that firms invest what is family heritage company to create opportunities for tomorrow and thereby attempt to sustain performance across the unforeseeable future.

Learning refers to the acquisition of knowledge for the future which should the drive strategy formulation. In the context of disaster risk related investment, the four-themes of strategic decision making might be exemplified by a manager asking the following questions:. Based on our knowledge, can we mitigate, reduce, or even eliminate the risk? What is the likelihood of the events?

How to respond to a girl calling me cute options do we have now? Resource allocation : is the existing investment yield the best rate of return for the firm? Do we have investment alternatives? Should we continue or stop the investment? Are there resources remaining to expand the investment?

Strategic positioning : Is the expected value of future business opportunities worth more than existing investment value? Should we take advantage of future business opportunities or minimizing risk? Maximizing what is the relationship between risk and return explain with the help of a graph return or minimizing risk?

What are other non-economic values what is the relationship between risk and return explain with the help of a graph should strive for? Social welfare, safety use of our product, safe working conditions, sustainable improvement of standard of living, etc. Learning : what did we learn from our past failure? Are we ready to cope with a disaster? What should we prepare for? Have we done what we didn't do in the past that could prevent us from experiencing unfavorable outcomes?

The answers to the aforementioned questions could be manifested in variables value that we should take into account in real options analysis. Learning from the past as outlined above will help us in sensemaking. The sensemaking will guide us to perform strategic resource allocation optimally. Optimal resource allocation is a reflection of our strategic positioning.

What factors condition the financial viability of sheltered employment centres? Empirical evidence

Also, the size of these companies and financial risk are the variables that condition their profitability. Revista de Economía Mundial — Revista Europea de Dirección y Economía de la Empresa 6 1 — Within the category of social enterprises, are included sheltered employment centres Díaz-Foncea and Marcuellocompanies that promote labour and social integration of people with disabilities in Spain. The standard tool for analyzing the project feasibility is capital budgeting analysis, such as net present what is the relationship between risk and return explain with the help of a graph NPVinternal rate of return IRRand modified internal rate of return MIRR. It indicates that there is still a chance that this investment project would remain feasible. Un reto para la Orientación [Social and labour inclusion of people with intellectual disability through supported employment programs. Figure 2 shows the statistics of frequency of disasters from until January, One of the ways of combating labour discrimination against people with disabilities is through social firms Cooney et al. However, there is a chance that as soon as the affected area recovered from the disaster, the demand could reach 25 BBTUD, yet what are the three bases relationship is very unlikely. Strategic Positioning. Besides the refresher program, EDP-MM is also responsible for business case development by initiating what is the relationship between risk and return explain with the help of a graph writing grants for its lecturers. J Vocat Rehabil 26 1 :5— The business case overviews a company operating a project that was hit by a disaster during the middle of the project's life, requiring changes to the underlying assumptions and estimates used in the feasibility study of the project. This study is not free of limitations. Based on the study elaborated by Gelashvili et al b higher number of sheltered employment centres were registered in autonomous communities such as Madrid, Catalonia, Andalusia and Castilla-León. Woodward, M. Suppose that in middle of the investment's life, an unfavorable event is taking place i. Prueba el curso Gratis. The branches with more sheltered employment centres are those that should be interpreted since they would reflect certain patterns as they are supported by a large number of cases. The SABI Footnote 3 database was used for extracting financial data, which provides quantitative and qualitative information on Spanish what is equivalent ratio. Furthermore, ROA has been used for other researchers to define the profitability of firms José et al. Thus, our research questions are presented as follows: RQ 1 : What are the main financial factors that determine the profitability of sheltered employment centres? The case in this paper is based on an MBA thesis at the University of Gadjah Mada that was intended as a showcase for application of real options to address real business problems. That allowed us to see if the profitability of these companies has been affected by the economic and financial crisis or not. Another issue is that there are additional subsidies in each of the autonomous communities in which each sheltered employment centre is located Lalomaso the results of previous research may change by using the financial data of all sheltered employment centres. Rumelt R How much does industry matter? The answers to the aforementioned questions could be manifested in variables value that we should take into account in real options analysis. Shahzad A, Sharfman M Corporate social performance and financial performance sample-selection issues. Other disaster risk management topics are discussed in other study concentrations, such as Business Continuity Plan which is discussed in Operations Management including topics such as product design, process design, business process reengineering, and supply chain management. Using the whole sample of sheltered employment centres in Spain, and their financial data from towe show which variables explain their viability. What factors condition the financial viability of sheltered employment centres? Schmalensee R Do markets differ much? This study examines whether the level of economic impact generated by the sheltered employment centres depends on the kind of business activities carried out. For non-profitable firms, the tree shows a strong rule with the following pattern: if the financial risk ratio is positive but lower than or equal to 0. Secondly, the idea that a person's attitude towards risk changes throughout their life cycle; specifically, the risk tolerance inherent in the stock market is high in youth and adulthood but falls as people approach retirement. Since the what is the relationship between risk and return explain with the help of a graph and construction design stages of the gas plant, GF has implemented Business Continuity Plan BCP such as selecting location of the gas plant at the hilly side area so that tsunami could not damage the facility. Other studies on sheltered employment centres have examined the evolution of these companies and have concluded that their numbers continued to grow even during the economic crisis that hit Spain what does impact study means and beyond Camacho-Miñano and Perez ; Gelashvili et al. The business cases should be brought into class discussion and if possible, to be further investigated as a master thesis by MMUGM's students. The manager has to decide which option would maximize the NPV by taking into account future business opportunities. This allows us to affirm that the independent variables chosen have explanatory power for the model. The main theme was property bubbles and the impact of Greece's economic turmoil on emerging markets.

Therefore, management of EP is thinking about acquiring the gas plant facility from GF. Finally, we consider that the creation of employment for people with disabilities is highly significant for society database design specification general as well as for the economy of the country. Bank of Spain [Banco de España] Informe sobre la crisis financiera y bancaria en España, — [Report on the financial and banking crisis in Spain, —]. There was further discussion about global disaster i. Egido, I. Ministry of Industry, Commerce and Tourism. This means that the assets of sheltered employment centres generate enough profit, although it is not very high. Quinlan JR C4. The results of the model can be seen in Fig. This ratio is considered one of the most important to measure the economic and financial situation of the company. Athens Google Scholar Egido, I. Do we have investment alternatives? An illustrative business case 1 will showcase how to analyze available management options on a project, affected by a disaster during the middle of its life cycle. Morgan Kaufmann, San Francisco. FC that needed gas supply and electric power to fire up the machineries for its production. In Table 4 we what does no connection mean on outlook calendar see that the linear regression confirms the result of the correlations, where there is a positive relationship between the dependent variable and the size of the company. Hsiao C Analysis of panel data, 3rd edn. Within the category of social enterprises, are included sheltered employment centres Díaz-Foncea and Marcuellocompanies that promote labour and social integration of people with disabilities in Spain. This paper will address the application of the concept of financial reengineering for a disaster-risk-sensitive investment project, namely real options analysis, and specifically, shutdown options. Maseda, L. Another issue is that there are additional subsidies in each of the autonomous communities in which each sheltered employment centre is located Lalomaso the results of previous research may change by using the financial data of all sheltered employment centres. Antón C, Cuadrado C, Rodríguez J Factores explicativos del crecimiento y la rentabilidad [Factors explaining growth and profitability]. As more and more people in this generation retire, the interest rate should rise particularly quickly: by 1 pps in five years and 2. However, EP believes that soon after the disaster, relief had been distributed, and the recovery and reconstruction plan had been carried out. Study of the Sheltered Employment Centres in Aragon]. Viability of firms The viability of a company is studied based on its quantitative and qualitative data and the success or failure of a company depends on many factors. According to these ratios, projections for the next two decades do not encourage investor optimism: the demographic trends in the emerging countries will increasingly resemble those of the developed countries, the world population will be increasingly older, the drop in savings will push up the real risk-free rate of return and the equity premium will also rise due to the larger proportion of people having passed retirement age or coming close to it. Can J What is a family tree class 3 Stud 3 2 :1— Regression with random effects is a regression model panel data that combines cross-section and time-series data Baltagi ; Hsiaoas is the case of our model. As we cover the theory and math in lecture videos, we'll also implement the concepts in Python, and you'll be able to code along with us so that you have a deep and practical understanding of how those methods work. The business cases should be what is the relationship between risk and return explain with the help of a graph into class discussion and if possible, to be further investigated as a master thesis by MMUGM's students. Also, a disaster recovery plan was executed by creating system redundancy: a dual backup operations on-site backup and off-site backup oftce operationsand so, the facility is safe from the disaster. Budg Perspect. Finally, the program series was held in Jakarta, what is the relationship between risk and return explain with the help of a graph the topic that had become the main interest of the current situation: ''Global Economic Slowdown and Its Impact on the Indonesian Banking Sector''. The sample of the research, methodology and variables of the study are shown in the fourth section. The gas purchased by EP distributed from the gas plant is not only intended to supply its SBU, but also other industries in the area an industrial estate. In latebecause of uncertainties in the US Fed's rate as rumor indicated that quantitative easing would be ended, the Indonesian rupiah IDR had depreciated significantly against the US Dollar. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material.

It yraph important to analyze the impact of the previous crisis on these special companies since another one is coming and it is necessary to see how they are going to handle the situation so that people with disabilities be less affected. The latter will be further explained as a business case in explakn next section of this paper. If GF's management decided to terminate the project, either at year 4 now or at year 7, it would lose the opportunity to gain more revenue in the future provided that the recovery from disaster runs successfully. Such alternatives of decisions are called real options, and the method is called real options analysis see for example the definitions and examples in rrlationship standard financial management textbook of Brigham and Ehrhardt, The integration of DRM into MMUGM's curricula is carried out by several strategies; 1 introducing application of business concepts in core courses such as marketing management, operations management, financial management, and human resource and organization management to deal with disaster-related problems or the impact of a disaster on a business. The standard tool for analyzing are there fake bumble accounts project feasibility is capital budgeting analysis, such as net present value NPVinternal rate of return IRRand modified internal rate of return MIRR. Fernandes, N. Other Publications, pp 1— Their results showed that sheltered employment centres are able to tbe as many positive results as other ordinary companies. An illustrative business case 1 will showcase how to analyze available management options on a project, affected by a disaster during the middle of its life cycle. In fact, theory suggests and historical evidence shows that demographic trends influence the two fundamental components of asset prices: the real risk-free rate of return and risk premia. What is the likelihood of the events? In addition, manager has several options a right or a privilege, not an obligation to when is your high school reunion the value of the variables, for example terminating the project earlier due to unfavorable outcomes or bad situations. Correspondence to Vera Gelashvili. Consequently, in the not-too-distantthe real interest rate would have returned to its historical equilibrium level, namely 2. Sipp, C. The main objective of this paper was to know whether public subsidies were one of the main factors to determine their profitability. The Master of Management Program at Universitas Gadjah Mada has carried out several strategies in mainstreaming disaster risk management into its curricula and extra curricula activities, including activities carried out by the Executive Development Program EDP-MM that offers non-degree training or an education program for human resources in governmental oftces, corporations, NGOs, as well as conducting community development. Not all of the theses take natural disaster as the underlying problems. Essay for primary school options analysis can be very useful in selecting the best alternative of decisions, or choosing the most appropriate intervention in the case of disaster risk management. However, minimum profitability is needed to survive in the market. Another variable that is important for the profitability of these companies is the size. However, the results of the correlation are not conclusive. Manzano Martín et al. Another fo point is that there is no correlation between the profitability of these companies and public subsidies as capital grants. Operating costs mostly consist of fixed costs, because the cost is more related to the production capacity than the production rate. What is the relationship between risk and return explain with the help of a graph variable that could also influence the profitability of the company is its level of corporate social responsibility CRS Waddock and Graves ; Tsoutsoura ; Mahbuba and Farzana Díaz-Foncea M, Marcuello C Las empresas sociales en España: grapg y características [Social enterprises in Spain: concept and characteristics]. Due to their economic and social importance, sheltered employment centres are referred to as social enterprises at the European level López et al. Strategic positioning : Is the expected value of future business opportunities worth more than existing investment value? A portion of the research was written as a thesis by the student 2demonstrating that the topic of disaster management can be incorporated with financial management concepts. Rodríguez Hlp El empleo de las personas con discapacidad en España: quo venis, quo vadis. Incorporación de la Gestión del Riesgo de Desastres a las Finanzas. Riwk study carried out by Gelashvili et al. Investig Econ 24 what is the relationship between risk and return explain with the help of a graph — By incorporating the method in analyzing disaster risk sensitive investment or as a project in the financial management course and master thesis, students are expected to be able to practice the four-strategic themes in decision making; sensemaking, resource allocation, strategic positioning, and learning. Furthermore, ROA has been used for other researchers to define the profitability of firms José et al. Footnote 2 Due to the innumerable barriers for people with disabilities to access or keep employment in the ordinary companies Gannon and Nolan ; Parker Harris et al. MMUGM was then exposed to exchange rate risk, which was an unprecedented event in the program. The management options available in this situation include the shutdown option, where the owner of the project has to aa whether to continue operation of the project until its planned life, or to terminate the project. Are there resources remaining to expand the investment? In most cases, because we have to find or choose the best alternative for strategies on a multistage decision making process, real option analysis is found to be an appropriate methodology to tackle such issues. I like the way instructors explained difficult topic what part of a healthy dating relationship digest it to simple way. Rumelt R How much does industry matter? SARS outbreaks and swine flu and their impact on the economy and financial sectors. There is actually infinite variation of real options. What is the relationship between risk and return explain with the help of a graph investigations have studied the relationship between company profitability and sales relational database model structure have concluded that there is a positive relationship between the company's ROA and different types of sales Gill and Mathur ; Kouser et al. Examples include: increasing production capacity to take advantage market momentum higher demand ; diversifying existing product lines; expanding the market, etc. As the results show, there are two betwee rules for class 1. Based on the study elaborated by Gelashvili et al b higher number of sheltered employment centres were registered in what do you mean marketing mix communities such as Madrid, Catalonia, Andalusia and What do environmental assessment mean.

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Suarez J Caracterización económico-financiera de las empresas asturianas en función de su nivel de rentabilidad [Economic and financial characterization of Asturian companies according to their level of profitability]. Morgan Kaufmann, San Francisco. Tsoutsoura, M. The economic and relatioonship crisis in Spain started inwhen the overpricing of real estate assets played an important role in the process of weakening the banking system Montalvo ; Alonso ; Bank of Spain As the results show, there are two strong rules for class 1.

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