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Purely Internal Rate of Return and Investment Decisions: A Cash-Flow Perspective
Magni, Carlo Alberto - MASTER CONSULTORES - 2010
The recent notion of Average Internal Rate of Return (AIRR) [Magni 2010, The Engineering Economist, 55(2), 150-180] completely solves the long-standing problem of the internal rate of return (IRR). While the AIRR is a return measure, this paper presents a cash-flow measure, namely the ratio of...
Persistent link: https://www.econbiz.de/10010763060
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Average internal rate of return and investment decisions: A new perspective
Magni, Carlo Alberto - MASTER CONSULTORES - 2010
The internal rate of return (IRR) is often used by managers and practitioners for investment decisions. Unfortunately, it has serious flaws: (i) multiple real-valued IRRs may arise, (ii) complex-valued IRRs may arise, (iii) the IRR is, in general, incompatible with the net present value (NPV) in...
Persistent link: https://www.econbiz.de/10010763083
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Decomposition of a Certain Cash Flow Stream: Systemic Value Added and Net Final Value
Magni, Carlo Alberto - MASTER CONSULTORES - 2009
, here named Systemic Value Added (SVA), which lends itself to a periodic decomposition. While as an overall index the … differ from the Net Present Value (NPV) decomposition model proposed by Peccati (1987, 1992), which in turn bears a strong … opportunity costs of capital, for which a tetra-dimensional decomposition is easily obtained. …
Persistent link: https://www.econbiz.de/10010763067