Appraisal of Capital-Intensive Investments Upon Effectiveness to Business Ecosystem

Abstract

The complexity of decision-making for capital intensive investments addressed to a variety of stakeholders with different expectations and to many business and financial risks and uncertainties. There are many cases where decision-makers and governmental authorities do not clearly distinguish between the investment likelihood alternative scenarios and the effectiveness of the investment to the business ecosystem. This especially applies to decisions regarding the implementation of capital-intensive projects where large amounts of capital are reserved, which is a major concern in the planning and business development process. Therefore, the appraisal of the investment effectiveness to business ecosystem into the project lifetime is very critical to support decision-makers. The key objective of the paper is to define and quantify the overall contribution of the capital-intensive project to a business ecosystem during its lifecycle. The paper provides a compact and applicable methodological framework providing quantitative results in terms of the overall income generated into the project life cycle. According to a deterministic approach, the key variables based on the project financial viability and likelihood scenarios are presented. The numerical application deals with the development of a new logistic center in Greece, stimulating new business opportunities by establishing a new freight transportation corridor from Black Sea to Southeast Mediterranean.