The internal rate of return (IRR) and the corresponding criterion has well-known difficulties of applicability and reliability. Among other problems, a project may have no real-valued IRR. The latter problem has been recently solved by Magni (2010a), who shows that, for any project, a unique...

Evaluating an industrial opportunity often means to engage in financial modelling which results in estimation of a large amount of economic and accounting data, which are then gathered in an economically rational framework: the pro forma financial statements. While the standard net present value...

This work presents a notion of residual income called Systemic Value Added (SVA). It is antithetic to Stewart’s (1991) EVA, though it is consistent with it in overall terms: a project’s Net Final Value (NFV) can be computed as the sum of capitalized EVAs or as the sum of uncapitalized SVAs....

This paper proposes a new way of decomposing net present values and net final values in periodic shares. Such a decomposition generates a new notion of residual income, radically different from the classical one available in the financial and accounting literature. While the standard residual...

This paper proposes a new way of decomposing net present values and net final values in periodic shares. Such a decomposition generates a new notion of residual income, radically different from the classical one available in the financial and accounting literature. While the standard residual...

The problem of decomposing a cash flow has been treated in recent years by Gronchi (1986, 1987), Peccati (1987, 1991, 1992), Stewart (1991), Pressacco and Stucchi(1997). After showing that the Economic Value Added introduced by Stewart bears a strong resemblance to (and in some conditions...

Evaluating an industrial opportunity often means to engage in financial modelling which results in estimation of a large amount of economic and accounting data, which are then gathered in an economically rational framework: the pro forma financial statements. While the standard net present value...

Discounted cash flows methods such as Net Present Value and Internal Rate of Return are often used interchangeably or even together for assessing value creation in industrial and engineering projects. Notwithstanding its difficulties of applicability and reliability, the internal rate of return...