Using the analytical hierarchy process to select a financing instrument for a foreign investment

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2 Citations (Scopus)

Abstract

The purpose of this paper is to apply the Analytical Heirarchy Process Model in selecting an instrument to finance a foreign direct investment. As with other finance decisions, risk and return are evaluated before the appropriate instrument is chosen. The model allows for several character sets to be evaluated. Included in this analysis are the nature of the investment, the financial instruments available and their characteristics. The set of elements needed to be financed are characterized by the amount and nature of the asset. Relevant factors in evaluating the instruments are: costs of borrowing and risks associated with the instrument. The set of financing instruments to be evaluated include a local institutional loan, international capital market loan, international capital market bond, and internally generated funds. This model, developed by Thomas Saaty (Saaty 1980), can be used to solve multicriteria problems by the use of a subjective scale to quantify decision factors.

Original languageEnglish
Pages (from-to)272-275
Number of pages4
JournalMathematical and Computer Modelling
Volume11
Issue numberC
DOIs
StatePublished - 1 Jan 1988

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Analytical Hierarchy Process
Finance
Character sets
Multi-criteria
Analytical Model
Process Model
Financing
Foreign investment
Analytical hierarchy process
Quantify
Costs
Model

Keywords

  • Analytical Hierarchy Process (AHP)
  • foreign investment

Cite this

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abstract = "The purpose of this paper is to apply the Analytical Heirarchy Process Model in selecting an instrument to finance a foreign direct investment. As with other finance decisions, risk and return are evaluated before the appropriate instrument is chosen. The model allows for several character sets to be evaluated. Included in this analysis are the nature of the investment, the financial instruments available and their characteristics. The set of elements needed to be financed are characterized by the amount and nature of the asset. Relevant factors in evaluating the instruments are: costs of borrowing and risks associated with the instrument. The set of financing instruments to be evaluated include a local institutional loan, international capital market loan, international capital market bond, and internally generated funds. This model, developed by Thomas Saaty (Saaty 1980), can be used to solve multicriteria problems by the use of a subjective scale to quantify decision factors.",
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AB - The purpose of this paper is to apply the Analytical Heirarchy Process Model in selecting an instrument to finance a foreign direct investment. As with other finance decisions, risk and return are evaluated before the appropriate instrument is chosen. The model allows for several character sets to be evaluated. Included in this analysis are the nature of the investment, the financial instruments available and their characteristics. The set of elements needed to be financed are characterized by the amount and nature of the asset. Relevant factors in evaluating the instruments are: costs of borrowing and risks associated with the instrument. The set of financing instruments to be evaluated include a local institutional loan, international capital market loan, international capital market bond, and internally generated funds. This model, developed by Thomas Saaty (Saaty 1980), can be used to solve multicriteria problems by the use of a subjective scale to quantify decision factors.

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