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dc.contributor.authorOrnelas Gonzalez, Myrna A.
dc.date.accessioned2014-03-04T20:00:19Z
dc.date.available2014-03-04T20:00:19Z
dc.date.issued2011-05
dc.identifier.otherornelas-gonzalez_myrna_a_201105_ms
dc.identifier.urihttp://purl.galileo.usg.edu/uga_etd/ornelas-gonzalez_myrna_a_201105_ms
dc.identifier.urihttp://hdl.handle.net/10724/27256
dc.description.abstractThe objective of this thesis is to evaluate entry and exit investment decisions for an ethanol plant in the state of Georgia under a real options approach (ROA) and compare the results to those obtained under the traditional net present value (NPV) approach. Dixit and Pindyck’s model of a firm’s entry and exit decisions under irreversible investment and price uncertainty is used to model entry and exit ethanol margin thresholds. We evaluate entry/exit decisions for two different size conventional ethanol plants: a 50 million gallon/year and a 100 million gallon/year plan under both the ROA and NPV approaches. Results suggest that by considering the stochastic nature of the ethanol margin, the irreversibility of investment in an ethanol plant, and the possibility to delay the investment /disinvestment decisions, the ROA yields more ―cautious‖ thresholds- the gap between entry and exit margins is shown to be consistently larger with ROA.
dc.languageeng
dc.publisheruga
dc.rightspublic
dc.subjectEthanol
dc.subjectInvestment
dc.subjectNet Present Value
dc.subjectReal Options
dc.subjectUncertainty.
dc.titleOptimal firm entry and exit in the ethanol industry
dc.typeThesis
dc.description.degreeMS
dc.description.departmentAgricultural and Applied Economics
dc.description.majorAgricultural Economics
dc.description.advisorBerna Karali
dc.description.committeeBerna Karali
dc.description.committeeMichael Wetzstein
dc.description.committeeTimothy Park


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