This paper addresses the issue of how regulatory constraints affect firm's investment choices when the firm has an … option to delay investment. The RPI-x rule is compared to a profit sharing rule, which increases the x factor in case profits … go beyond a given level. It is shown that a pure price cap and profit sharing are identical in their impact on investment …

In the conventional literature related to investment decisions, less attention has been paid to the length of maturiry … investment cost multiplied by real interest rate) for the entire borrowing years but also the total amount of initial investment …' investment decisions are compared on the basis of the simple net present value (NPV) model. Without taxation, the NPV is equal to …