- •Abstract
- •1. Introduction
- •1.1. Background
- •1.2. Problem and research questions
- •1.3. Aim and Limitation
- •1.4. Outline of thesis
- •1.5. Abbreviation and definition
- •Irr Internal Rate of Return
- •2. Method
- •2.1. Approach
- •2.2. Data collection method
- •2.3. Primary data
- •2.4. Secondary data
- •2.5. Data processing
- •2.6. Validity, reliability and generalization
- •3. Theories
- •3.1. Principal-Agent Problems
- •3.2. Wacc and opportunity cost of capital
- •3.3. Capm and apt
- •3.4. Estimating β
- •3.4.1. Operating leverage and β
- •3.5. The risk and discount rates for international projects
- •3.6. Purposes of performance measurement
- •3.6.1. Eva, Book roi, and ep
- •3.7. Working capital, depreciation and tax
- •4. Own research
- •4.1. Review of pharmaceutical market in Russia
- •3.1.1. Russian companies and them place in market
- •3.1.2. Pharmaceutical company “Zdorovie Ludi”
- •3.2. Research strategy (Roadmap of decision)
- •3.3. International and European contracts
- •3.4. National contracting in a global economy
- •3.5. National contract low and human rights
- •3.6. (Step 1) Juristic analyses and common mistakes of the contract
- •3.6.1. The formation and scope of a contract:
- •3.6.2. The content of a contract:
- •3.6.3. Policing a contract:
- •3.6.4. Performance, discharge and breach of the contract:
- •3.7. (Step 2) Controlling of strategy and consideration the contract as investment project
- •3.8. Transformation the contract to the invest project
- •Risk of delivery (for buyer)
- •Techniques of payment (risk for buyer)
- •3.9. (Step3) Forecast of outflow and inflow
- •3.10. (Step 4) Determination the risk and discount rate
- •3.10.1. Country risk analysis
- •3.11. Commercial counterparty risk analysis
- •3.12. (Step 5) Procedure of estimation and comparison of the contract
- •3.13. Book Rate of Return (Advantages and disadvantages)
- •3.14. Payback Period and Discounted-Payback Period (Advantages and disadvantages)
- •3.15. Internal (or discounted-cash-flow) rate of return (irr) and mirr (Advantages and disadvantages)
- •3.15.1. Lending or borrowing position
- •3.15.2. Multiple rates of returns
- •3.15.3. Mutually exclusive projects
- •3.16. The cost of capital for near-term and distant cash flows
- •3.17. Profitability Index (pi, advantages and disadvantages)
- •3.18. Net Present Value (npv, advantages and disadvantages)
- •3.18.1 Calculate npv with glance of inflation
- •3.18.2 Calculating npv in other countries and currencies
- •3.19. (Step 6) Performance and agency problems
- •4. Results
- •4.1. Simulation model analysis and calculation
- •4.2.1. Wacc as discount rate
- •4.2.2. Manager’s working capital use penalty points
- •4.2.3. Risk-Adjusted Discount Rate (radr) and ceq
- •4.3. Summary of Simulation model analysis
- •4.4. Scenario analysis and calculation
- •4.4.1. Discount rates that based on wacc
- •4.4.2. Discount rates that based on radr
- •4.5. Summary of scenario analysis
- •4.6. Final analysis and Decision Card (Step 7)
- •Decision Card
- •4.7. What could be improved and suggestion for future research.
- •Conclusion
- •References
- •Appendix 1 – 7 (Simulation Model and Scenario analysis calculation) (Excel) Appendix 1 (Excel)
- •Appendix 2 (Excel)
- •Appendix 3 (Excel)
- •Appendix 4 (Excel)
- •Appendix 5 (Excel)
- •Appendix 6 (Excel)
- •Appendix 7 (Excel)
- •Appendix 8 (Interview questions and structure of survey) part 1
- •A) Survey for managers
- •B) Survey for specialist
- •Part 2 Survey of experts
- •Part 3 Results and Conclusion a) Survey for managers
- •Conclusion
- •B) Survey for specialist
- •Conclusion
- •C) Survey of experts
3.6.3. Policing a contract:
- Misrepresentation (A misrepresentation may be defined as an unambiguous false statement of fact or law which is addressed to the party misled, which is material and which induces the contract. Mere puff, statement of opinion and statement of intention are not statement of fact).
- Mistake and frustration policing of the contract (Where both parties enter a contract under a common fundamental mistake which relates to an essential element of the subject-matter of the contract then the contract is void at law. A mistake may be to avoid a contract where both parties are mistaken as to the existence of the subject-matter of the contract. A mistake may be sufficiently fundamental to avoid a contract where both parties believe that the contract is capable of being performed when, in fact, it is not. The impossibility may be physical, legal or commercial. A contract is frustrated where, after the contract was concluded, events occur which make performance of the contract impossible, illegal or something radically different from that which was in the contemplation of the parties at time they entered into the contract. A contract is not frustrated where the parties have made express provision for the consequences of the alleged frustrating event in the contract, where the alleged frustrating event was a foreseeable one or where the frustration was “self-induced”).
- Illegality (The general rule the courts will not enforce a contract which is illegal or which is otherwise contrary to public policy. Where the illegality arises in the performance of a contract which was valid at the moment of formation, the contract can be enforced by the guilty party only when it was not the purpose of the statute broken or the common law rule violated that the contract should be invalidated. The contracts may be illegal if it contrary to public policy include contracts which are contrary to good moral, contracts which are prejudicial to family life, contracts to commit a crime or civil wrong, contracts which are prejudicial to the administration of justice, contracts prejudicial to public relation and contracts in unreasonable restraint of trade).
- Capacity (The general rule is that a minor is not bond by a contract which he enters into during his minority. At common law mental incapacity is not a ground for the setting aside of a contract, unless the incapacity is known to the other party to the contract).
- Duress, undue influence and inequality of bargaining power (The law of contract has always placed limits upon the exercise of economic power by contracting parties. A contract may be aside on the ground of duress. The duress may be to the person, to his goods or economic duress).
3.6.4. Performance, discharge and breach of the contract:
- Performance (Contracts are made to be performed. The vast majority of contracts are discharged by performance. Contracts maybe discharged by performance, agreement, operating of law or breach. A contract may be discharged by operating of law by the occurrence of a frustrating event).
- Breach of contract (A breach of contract is committed when a party without lawful excuse fails or refuses to perform what is due from him under the contract, performs defectively or incapacitates himself from performing).
- Damages (the aim of an award of damages is to compensate the claimant for the loss which he has suffered as a result of the defendant’s breach of contract. The aim is not punish the defendant. The aim of an award of damages is to put the claimant in the position which he would have been in had the contract been performed according to its terms. This may be measured either by the cost of cure measure or the diminution in value measure. A court will not award cost of cure damages where it would be unreasonable to do so).
- Remedy (A party who, in breach of contract, fails to perform an obligation which is entire cannot generally make any claim for payment from the innocent party. But the rule is subject to exceptions where the party in breach has substantially performed his obligations under the contract where the innocent party has accepted the part performance and where the court holds that the obligation is not entire but divisible).