Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-15T08:39:51.986Z Has data issue: false hasContentIssue false
  • English
  • Français

Evaluating Negative Benefits

Published online by Cambridge University Press:  06 April 2009

William L. Beedles
Get access Rights & Permissions [Opens in a new window]

Extract

Evaluating investments by discounting anticipated future benefits at an exogenously determined risk-adjusted discount rate (hereafter referred to as the RADR approach) is well accepted in the canon of finance. If benefits (Dt) are to be received for T periods and if k, the discount rate, is constant over each of the t periods, then the discrete time net present value (NPV) is defined as:

A positive NPV characterizes a desirable investment.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 13 , Issue 1 , March 1978 , pp. 173 - 176
Copyright
Copyright © School of Business Administration, University of Washington 1978

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

[1]Jean, William H.Finance. Hinsdale Ill.: The Dryden Press (1973).Google Scholar
[2]Lorie, James H., and Savage, Leonard J.. “Three Problems in Rationing Capital.” Journal of Business, Vol. 28, No. 4 (10 1955), pp. 229–239.CrossRefGoogle Scholar
[3]Robichek, Alexander A., and Myers, Stewart C.. Optimal Financing Decisions. Englewood Cliffs, N.J.: Prentice-Hall, Inc. (1965).Google Scholar
[4]Robichek, Alexander A., and Myers, Stewart C.. “Conceptual Problems in the Use of Risk-Adjusted Discount Rates.” Journal of Finance, Vol. 21, No. 4 (12 1966), pp. 727–730.Google Scholar
[5]Weston, J. Fred, and Brigham, Eugene F.. Managerial Finance, 5th ed.Hinsdale, 111.: The Dryden Press (1975).Google Scholar