Anomalies in net present value calculations. A solution

The so-called anomalies that arise in the computation and interpretation of the Net Present Value (NPV) and the Internal Rate of Return (IRR) can be easily overcome if the properties of the NPV function are taken into account and it is clearly defined what is an investment and what is a credit. All the roots of the NPV function have economic meaning and, when there is at least one IRR, the NPV and the IRR criteria agree.

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Year of publication:	2005
Authors:	Rocabert, Joan Pasqual ; Tarrío, José Antonio ; Pérez, María José
Published in:	Hacienda Pública Española. - Instituto de Estudios Fiscales. - 2005, 2, p. 47-60
Publisher:	Instituto de Estudios Fiscales
Subject:	Net Present Value \| Internal Rate of Return \| Investment Analysis \| Project Evaluation

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Extent:	application/pdf
Type of publication:	Article
Classification:	Q28 - Government Policy ; D92 - Intertemporal Firm Choice and Growth, Investment, or Financing
Source:	RePEc - Research Papers in Economics

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