E-Capital Budgeting: Managing Strategic Investments in a World of Uncertainty

E-Capital Budgeting: Managing Strategic Investments in a World of Uncertainty

Parvez Ahmed (Penn State Harrisburg, USA)
Copyright: © 2002 |Pages: 16
DOI: 10.4018/978-1-930708-12-9.ch011
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Abstract

Over the last five years, firms with strong presence on the Internet have seen increases in the value of their firms to what some consider obscene levels. The “new era” economy has led to “irrational exuberance” in the stock market. This era of uncertainty has also unleashed numerous valuable opportunities for firms. The world in general and e-commerce ventures in particular are dominated by strategic investments with lots of uncertainty that require huge capital outlays. Moreover, these projects must have the ability to adapt to changing conditions that evolve as new information becomes available. The failure of traditional discounted cash flows (DCF), such as NPV, in valuing e-commerce projects is partially due to meager cash flows relative to required investments and high discount rate due to unknown risk in the projects. This chapter will show how techniques used in valuing financial options can be used to value project or firms under conditions of extreme uncertainty.

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Table of Contents
Preface
Aryya Gangopadhyay
Chapter 1
Leila Alem, Ryszard Kowalczyk, Maria R. Lee
Intelligent negotiation agents are software agents, which can negotiate the terms of transactions on behalf of purchasers and vendors on the... Sample PDF
Supporting Electronic Negotiation for Intelligent Trading
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Chapter 2
Peter Rittgen
Early information systems were mainly built around secondary, administrative processes of the value chain (e.g., accounting). But since the Internet... Sample PDF
E-Commerce Software: From Analysis to Design
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Chapter 3
Bernhard Strauch, Robert Winter
E-commerce is changing the nature of business. To support ‘buying and selling over digital media’ for private and corporate Web users, companies... Sample PDF
Towards a Methodology for the Development of Web-Based Systems: Models, Methods and Activities for Conceptual Design of Large Web-Based Information Systems
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Chapter 4
Anupam Joshi, Zhihua Jiang
Web search engines have become increasingly ineffective as the number of documents on the Web have proliferated. Typical queries retrieve hundreds... Sample PDF
Retriever: Improving Web Search Engine Results Using Clustering
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Chapter 5
Ramesh Subramanian, Minnie Yi-Miin Yen
In this chapter, we examine Digital Asset Management concepts, detail the desirable features and components of DAM, the taxonomy of the DAM systems... Sample PDF
Digital Asset Management: Concepts and Issues
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Chapter 6
Kemal Altinkemer, Kerem Tomak
The study divides the Internet Economy into four layers. The first layer consists of the telecommunications companies, Internet Service Providers... Sample PDF
Pricing and Service Quality in Electronic Commerce
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Chapter 7
Subhasish Dasgupta, Rajesh Chandrashekaran
In this chapter we propose a framework for the delivery and tracking of rotating banner advertisements on the World Wide Web (WWW). The proposed... Sample PDF
Delivery and Tracking of Rotating Banner Advertisements on the World Wide Web: An Information System Model
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Chapter 8
Merrill Warkenton, Akhilesh Bajaj
Traditional business models are increasingly being replaced by newer business models based on relationships enabled by information technologies. In... Sample PDF
The On-Demand Delivery Services Model for eCommerce
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Chapter 9
Pat Finnegan, John Kilmartin
The advantages of electronic trading are numerous, with benefits for both users and merchants. However for electronic trading to reach its full... Sample PDF
Electronic Payment Systems: An Empirical Investigation of Customer and Merchant Requirements
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Chapter 10
Richard Holowczak
The financial services industry consists of retail financial services such as retail banking, consumer lending and mortgage banking, insurance... Sample PDF
E-Commerce in the Financial Services Industry
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Chapter 11
Parvez Ahmed
Over the last five years, firms with strong presence on the Internet have seen increases in the value of their firms to what some consider obscene... Sample PDF
E-Capital Budgeting: Managing Strategic Investments in a World of Uncertainty
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Chapter 12
Ulrike Baumoel, Thomas Stiffel, Robert Winter
Although many corporations currently try to establish e-commerce as a new field of business and as many corporations are already in the middle of... Sample PDF
A Concept for the Evaluation of E-Commerce-Ability
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Chapter 13
Martin Barnett, Janice M. Burn
This chapter looks at models for organizational development using the potential of virtual organization for established firms. For established... Sample PDF
Strategies for Bricks to Beat Clicks - How Established Business Can Incorporate the New Technologies
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Chapter 14
Jatinder N.D. Gupta, Sushil K. Sharma
At times, privacy issues are perceived as a part of security issues, therefore, let us differentiate them. Security refers to the integrity of the... Sample PDF
Cyber Shopping and Privacy
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About the Authors