Abstracts - faqs.org

Abstracts

Business

Search abstracts:
Abstracts » Business

Capital budgeting and the stochastic cost of capital

Article Abstract:

Internal rate of return remains to be the most widely adopted capital budgeting strategy among US business enterprises, despite its inherent drawbacks. Although IRR presents decision-making and project-ranking difficulties, statistics revealed that more than 60% of multinational firms employ the technique. The growing popularity of IRR can be explained by the stochastic nature of cost capital. Financial managers tend to choose IRR over net present value since it underscores a firm's internal characteristics, instead of the general financing environment.

Author: Chatrath, Arjun, Seiler, Michael J.
Publisher: Barmarick Publications (UK)
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1997
Methods, Analysis

User Contributions:

Comment about this article or add new information about this topic:

CAPTCHA


Evaluating on-going projects and divisions

Article Abstract:

Internal rate of return (IRR) and modified internal rate of return (MIRR) are two capital budgeting strategies which guarantee optimal results when evaluating the feasibility and profitability of on-going projects and divisions. Although the two techniques are relatively the same, MIIR is more preferable since it generates more accurate reinvestment rate projections. Experts claim that continuance decisions and profitability determination can be made more accurate if NPV is evaluated over a specific period of time.

Author: Finch, J. Howard, Fulmer, John G.
Publisher: Barmarick Publications (UK)
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1997
Evaluation, Project finance, Present value

User Contributions:

Comment about this article or add new information about this topic:

CAPTCHA



Subjects list: Financial management, Return on investment, Rate of return, Capital budgets
Similar abstracts:
  • Abstracts: Revisiting the corroboration effects of earnings and dividend announcements. Should there exist secondary markets for executive stock options?
  • Abstracts: Don't get hurt by high-income bonds. On the trail of traditional options
  • Abstracts: Performance plan adoption and corporate performance. What is so special about emerging markets? Firm performance measures: temporal roadblocks to innovation?
This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.
Some parts © 2023 Advameg, Inc.