Real options analysis applied to investment projects in planted forests of Pinus
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Outros Autores: | , , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional da UNESP |
Texto Completo: | http://dx.doi.org/10.19182/bft2022.354.a36895 http://hdl.handle.net/11449/246837 |
Resumo: | Planted forests are long-term projects involving a large monetary contribution, and generally require the incorporation of managerial flexibility. As the traditional methodology for economic evaluation does not allow for the incorporation of these flexibilities, our study aimed to analyze whether investment projects in planted forests of Pinus elliottii Engelm. are economically feasible, by applying a real options analysis. We used empirical data from one hectare of a planted forest of P. elliottii with a 14-year planning horizon. Managerial flexibilities were incorporated in combinations and also separately, as options to defer, expand or abandon the investment project. Through Monte Carlo simulation, the present value of USD 1.016 was conditioned to anticipated return values from the second to the fourteenth year, with a volatility return of 14.5%. With real options analysis, the value of the combined options was USD 29, which, in terms of traditional net present value, showed an expanded net present value of USD 468. The real options analysis thus shows that investment projects in planted forests of P. elliottii are economically feasible. Given that real options analysis is a methodology not widely used in the forestry sector for economic analysis of investment projects, this study can be used to assist forest managers in analysing investment risks and decisions, specifically those related to market fluctuations of planted forests of Pinus spp., assuming that the real options of deferral, expansion and abandonment of an investment project are used. |
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Real options analysis applied to investment projects in planted forests of PinusAnálisis de opciones reales aplicadas a proyectos de inversión en plantaciones forestales de PinusAnalyse des options réelles appliquée aux projets d’investissement dans les forêts plantées à PinusBrazilcombined optionsexpanded net present valueforest economymanagerial flexibilityrisk managementsilviculturePlanted forests are long-term projects involving a large monetary contribution, and generally require the incorporation of managerial flexibility. As the traditional methodology for economic evaluation does not allow for the incorporation of these flexibilities, our study aimed to analyze whether investment projects in planted forests of Pinus elliottii Engelm. are economically feasible, by applying a real options analysis. We used empirical data from one hectare of a planted forest of P. elliottii with a 14-year planning horizon. Managerial flexibilities were incorporated in combinations and also separately, as options to defer, expand or abandon the investment project. Through Monte Carlo simulation, the present value of USD 1.016 was conditioned to anticipated return values from the second to the fourteenth year, with a volatility return of 14.5%. With real options analysis, the value of the combined options was USD 29, which, in terms of traditional net present value, showed an expanded net present value of USD 468. The real options analysis thus shows that investment projects in planted forests of P. elliottii are economically feasible. Given that real options analysis is a methodology not widely used in the forestry sector for economic analysis of investment projects, this study can be used to assist forest managers in analysing investment risks and decisions, specifically those related to market fluctuations of planted forests of Pinus spp., assuming that the real options of deferral, expansion and abandonment of an investment project are used.São Paulo State University(UNESP) School of Agriculture Department of Forestry Soils and Environment, 3780, Universitária AvenueSão Paulo State University(UNESP) School of Agriculture Department of Forestry Soils and Environment, 3780, Universitária AvenueUniversidade Estadual Paulista (UNESP)Simões, Danilo [UNESP]Rocha, Qüinny Soares [UNESP]Munis, Rafaele Almeida [UNESP]Da Silva, Richardson Barbosa Gomes [UNESP]Garcia, Giovani Caprioli [UNESP]2023-07-29T12:51:49Z2023-07-29T12:51:49Z2022-12-01info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article55-64http://dx.doi.org/10.19182/bft2022.354.a36895Bois et Forets des Tropiques, v. 354, n. 4, p. 55-64, 2022.1777-57600006-579Xhttp://hdl.handle.net/11449/24683710.19182/bft2022.354.a368952-s2.0-85148108173Scopusreponame:Repositório Institucional da UNESPinstname:Universidade Estadual Paulista (UNESP)instacron:UNESPengBois et Forets des Tropiquesinfo:eu-repo/semantics/openAccess2023-07-29T12:51:49Zoai:repositorio.unesp.br:11449/246837Repositório InstitucionalPUBhttp://repositorio.unesp.br/oai/requestopendoar:29462024-08-05T16:58:55.965660Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP)false |
dc.title.none.fl_str_mv |
Real options analysis applied to investment projects in planted forests of Pinus Análisis de opciones reales aplicadas a proyectos de inversión en plantaciones forestales de Pinus Analyse des options réelles appliquée aux projets d’investissement dans les forêts plantées à Pinus |
title |
Real options analysis applied to investment projects in planted forests of Pinus |
spellingShingle |
Real options analysis applied to investment projects in planted forests of Pinus Simões, Danilo [UNESP] Brazil combined options expanded net present value forest economy managerial flexibility risk management silviculture |
title_short |
Real options analysis applied to investment projects in planted forests of Pinus |
title_full |
Real options analysis applied to investment projects in planted forests of Pinus |
title_fullStr |
Real options analysis applied to investment projects in planted forests of Pinus |
title_full_unstemmed |
Real options analysis applied to investment projects in planted forests of Pinus |
title_sort |
Real options analysis applied to investment projects in planted forests of Pinus |
author |
Simões, Danilo [UNESP] |
author_facet |
Simões, Danilo [UNESP] Rocha, Qüinny Soares [UNESP] Munis, Rafaele Almeida [UNESP] Da Silva, Richardson Barbosa Gomes [UNESP] Garcia, Giovani Caprioli [UNESP] |
author_role |
author |
author2 |
Rocha, Qüinny Soares [UNESP] Munis, Rafaele Almeida [UNESP] Da Silva, Richardson Barbosa Gomes [UNESP] Garcia, Giovani Caprioli [UNESP] |
author2_role |
author author author author |
dc.contributor.none.fl_str_mv |
Universidade Estadual Paulista (UNESP) |
dc.contributor.author.fl_str_mv |
Simões, Danilo [UNESP] Rocha, Qüinny Soares [UNESP] Munis, Rafaele Almeida [UNESP] Da Silva, Richardson Barbosa Gomes [UNESP] Garcia, Giovani Caprioli [UNESP] |
dc.subject.por.fl_str_mv |
Brazil combined options expanded net present value forest economy managerial flexibility risk management silviculture |
topic |
Brazil combined options expanded net present value forest economy managerial flexibility risk management silviculture |
description |
Planted forests are long-term projects involving a large monetary contribution, and generally require the incorporation of managerial flexibility. As the traditional methodology for economic evaluation does not allow for the incorporation of these flexibilities, our study aimed to analyze whether investment projects in planted forests of Pinus elliottii Engelm. are economically feasible, by applying a real options analysis. We used empirical data from one hectare of a planted forest of P. elliottii with a 14-year planning horizon. Managerial flexibilities were incorporated in combinations and also separately, as options to defer, expand or abandon the investment project. Through Monte Carlo simulation, the present value of USD 1.016 was conditioned to anticipated return values from the second to the fourteenth year, with a volatility return of 14.5%. With real options analysis, the value of the combined options was USD 29, which, in terms of traditional net present value, showed an expanded net present value of USD 468. The real options analysis thus shows that investment projects in planted forests of P. elliottii are economically feasible. Given that real options analysis is a methodology not widely used in the forestry sector for economic analysis of investment projects, this study can be used to assist forest managers in analysing investment risks and decisions, specifically those related to market fluctuations of planted forests of Pinus spp., assuming that the real options of deferral, expansion and abandonment of an investment project are used. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-12-01 2023-07-29T12:51:49Z 2023-07-29T12:51:49Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://dx.doi.org/10.19182/bft2022.354.a36895 Bois et Forets des Tropiques, v. 354, n. 4, p. 55-64, 2022. 1777-5760 0006-579X http://hdl.handle.net/11449/246837 10.19182/bft2022.354.a36895 2-s2.0-85148108173 |
url |
http://dx.doi.org/10.19182/bft2022.354.a36895 http://hdl.handle.net/11449/246837 |
identifier_str_mv |
Bois et Forets des Tropiques, v. 354, n. 4, p. 55-64, 2022. 1777-5760 0006-579X 10.19182/bft2022.354.a36895 2-s2.0-85148108173 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Bois et Forets des Tropiques |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
55-64 |
dc.source.none.fl_str_mv |
Scopus reponame:Repositório Institucional da UNESP instname:Universidade Estadual Paulista (UNESP) instacron:UNESP |
instname_str |
Universidade Estadual Paulista (UNESP) |
instacron_str |
UNESP |
institution |
UNESP |
reponame_str |
Repositório Institucional da UNESP |
collection |
Repositório Institucional da UNESP |
repository.name.fl_str_mv |
Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP) |
repository.mail.fl_str_mv |
|
_version_ |
1808128728597790720 |