John Johnson, the owner of the FinePrint Company, is presented with several opportunities to consider: (1) whether to accept a one-time special printing order (the A case, UVA-C-2193), (2) whether to outsource some of his printing to another printing company (the B case, UVA-C-2194), and (3)...

SUBJECT AREAS: Corporate Finance, Valuation, Capital Budgeting, Investment Policy, Economic Value Added, EVA, Market Value Added, MVA, Net Present Value, NPV, cash flows, free cash flows real free cash flowsThis technical note studies Economic Value Added, EVA. First, a conceptual framework...

This study examines the different managerial uses of post-completion auditing (PCA) of capital investments. The empirical data come from the 16 PCA adopters that were identified in face-to-face interviews conducted in all of the 30 largest Finnish manufacturing companies. Although PCAs are...

For cash flows in perpetuity without growth, analysts typically use the following formula for the return to levered equity Ke.lt;brgt;lt;brgt;Ke = Ku + (Ku shy; Kd)(1 shy; T)D/E (1) lt;brgt;lt;brgt;where Ku is the return to unlevered equity, Kd is the cost of debt, T is the tax rate, D is the...

Why do people have ambiguity aversion, preferring, a gamble with a 50% chance of success to one whose expected probability of success is 50% but where that 50% is an unbiased estimate? The answer modelled here, in the spirit of the career concerns literature, is learning: a risk-averse person...

Adopting management accounting systems are important events in the life of young and growing companies. Using a sample of 78 startup companies, we document cross-sectional differences in the adoption of operating budgets as well as seven other management accounting systems. We find that our...