The Brand Economic Model Of Investment Appraisal And Its Application

This dissertation provides the economic approaches to the brand by using the analytical methods and tools of economics and introduces the brand into the analytical framework of investment appraisal. The research is a new application of economics theory or a research of introducing a new element into investment appraisal theory.Investment is the money capital translating into productive capital, while the capital starts from the circulation of commodities (Marx,1867). With the continuous improvement of the social productive forces, excess economy has become normal, the final realization of the value of commodities depends on consumer choices and purchasing decisions, which also determines the success or failure of investment. Consumer choice and decision-making process is to achieve cost-optimized process of selection under limited conditions. The significance of the brand lies in its essence is to reduce the cost of consumer choice through exclusive category symbols. Investment appraisal model based on brand is a major analysis of this object, it is also the core of this study.The economic analysis about investment comes from the "breathtaking leap", that is the final realization of the investment. Through the analysis of choice cost and the relationship between brand and consumer, brand is introduced into the investment appraisal analysis, which is to achieve the investment appraisal for further precision. In other words, this paper will be based on choice cost, and brand in turn will be introduced to the basic method of investment appraisal, bank loan assessment, securities investment appraisal, investment appraisal theory of mergers and acquisitions to build a general conceptual framework for assessment of learning.Firstly, the investment appraisal theoretical-IVB model is proposed. In this paper, the traditional investment theory combines with the brand economics, and accordingly the existing investment evaluation methods are analyzed and improved. The traditional investment appraisal methods'main problem is that the project output is considered equal to sales, which lead to that many projects are unable to achieve the expected benefits even they have achieved the investment appraisal. Therefore, this article has improved through the elimination of such default and made the brand as a table of indicators and external factors into the investment appraisal system as possible. In this paper, the introduction of the brand's investment evaluation model-IVB model is used to explain the reality of the investment.Secondly, IVB model can be used to improve the traditional bank loan evaluation system through the introduction of brand. In this paper, domestic credit assessment method has been some mistakes. Reflection mainly includes two aspects, first is that the companies with good performance does not mean its future operating results; two is that the project output is not equal to sales, which means the traditional investment evaluation method ignores the uncertainty of the project. Therefore, this paper proposed the introduction of the corresponding uncertainty analysis of the assessment of the project ideas, and the uncertainty of the project is divided into the cost of uncertainty and earnings uncertainty. The reason of the uncertainty of returns is that consumer lack of information, to overcome this uncertainty can only rely on the company to enhance its brand. In this way, through the introduction IVB model, project loan evaluation system will achieve innovation. After that, it explains the difficult problem loans to SME and proposes the introduction of the assessment IVB model in SME lending.Thirdly, IVB model can be used to improve the traditional portfolio assessment model through the introduction of brand. The value of the company depends on its future net cash flow. Because of excessive supply, the choice of consumer and the net cash flow for the company depend on the brand. This part starts with the influence of the brand to the choice of consumer, and raises an investment model based on brand. This article also gives an explanation of the Buffett's investment and gives a model of "brand-the ratio of price to value". This study enrichs and improves the traditional investment theory.Fourthly, IVB model can be used to explain the value of mergers and acquisitions investment effect. The purpose of company mergers and acquisitions is to create value. Traditional theories of the value of the company's M & A pay more attention to transaction costs. Based on Brand Economics, choice cost is used to explain the value of the company's M & A effect. "Brand-cost" two-dimensional model and corporate effects test model are proposed, and the models are used to explain the reality. This paper studies further enrich and improve the company's M & A theory.General speaking, my research is actually the extension and application of the brand economics. In a word, my dissertation adds a new concept of choice cost to the concept box of investment appraisal to establish a new concept box so that the research of the dissertation can create a new realm for investment appraisal and brand economics especially.