Carlos Heitor Campani: We provide a solution for evaluating non-conventional projects, firstly showing that the well-known modified internal rate of return does not correctly answer what investors want to measure.
Professor of Finance, COPPEAD Graduate School of BusinessResearch Associate, EDHEC-Risk Institute
Even if one correctly uses the net present value criterion for capital budgeting, we show that it fails for nonconventional projects. Our contribution is thus twofold: To yield the correct rate of return for nonconventional projects and to allow practitioners to correctly calculate comparable net present values to take correct investment decisions.
|Type :||Working paper|
|Date :||le 06/10/2014|
|Pôle de recherche||Finance|