One of the debates in the capital budgeting model selection is between the free cash flow and DCF methods. In this paper an attempt is made to compare SVA against NPV model based on Monte Carlo simulations. Accordingly, NPV is found less sensitive to value driver variations and has got higher...

This paper sets forth a pair of distinctive contributions to the subject. In the first place, it provides a unified approach to capital investment decisions, by means of a two-tiered framework of analysis. Such approach consists in working out the net present value of the project by discounting...

This paper introduces a new method, different from the discounted cash flow (DCF) method, for the first time, to estimate NPV and IRR. This method makes use of the capital amortization schedule (CAS). The functional relationship between the closing balance in CAS and the NPV and IRR are derived...