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On the Long-Standing Issue of the Internal Rate of Return : A Complete Resolution

Magni, Carlo Alberto - 2010

, different from the NPV ranking, (v) the IRR decision criterion is not applicable with variable costs of capital. Since the …

Persistent link: https://www.econbiz.de/10013142405

Mathematical Analysis of Average Rates of Return and Investment Decisions : The Missing Link

Magni, Carlo Alberto - 2014

general model of economic profitability for investment decision-making. Specifically, TRM's assumptions are relaxed and a …

Persistent link: https://www.econbiz.de/10013061416

The Internal-Rate-of-Return Approach and the AIRR Paradigm : A Refutation and a Corroboration

Magni, Carlo Alberto - 2014

This paper shows that the Internal-Rate-of-Return (IRR) approach is unreliable, and that the recently introduced Average-Internal-Rate-of-Return (AIRR) model constitutes the basis for an alternative theoretical paradigm of rate of return. To this end, we divide the paper into two parts: a pars...

Persistent link: https://www.econbiz.de/10013065096

Arithmetic Returns for Investment Performance Measurement

Magni, Carlo Alberto - 2014

This paper introduces new money-weighted metrics for investment performance analysis, based on arithmetic means of holding period rates weighted by the investment's market values. This approach generates rates of return which measure a fund's or portfolio's performance and a fund manager's...

Persistent link: https://www.econbiz.de/10013065991

A Quasi-IRR for a Project Without IRR

Pressacco, Flavio - 2014

Discounted cash flows methods such as Net Present Value and Internal Rate of Return are often used interchangeably or even together for assessing value creation in industrial and engineering projects. Notwithstanding its difficulties of applicability and reliability, the internal rate of return...

Persistent link: https://www.econbiz.de/10013068345

Reasoning the ‘Net-Present-Value’ Way : Some Biases and How to Use Psychology for Falsifying Decision Models

Magni, Carlo Alberto - 2010

-minded decision makers are observed and analyzed. As a result, one finds out that the NPV methodology is biased and its decision …

Persistent link: https://www.econbiz.de/10013138410

Value-based Performance Measurement with the Attribution Matrix and the Finite Change Sensitivity Index

Magni, Carlo Alberto; Marchioni, Andrea; Baschieri, Davide - 2021

one hand, detects the (manager and client) decision effects, measuring the impact of manager/investor choices on the … decisions made by the manager (manager decision effect) and the value generated by the client/investor (client decision effect … decision effects, the value added of an active investment portfolio is broken down in terms of the value generated by the …

Persistent link: https://www.econbiz.de/10013241060

Value Creation and Investment Projects : An Application of Fuzzy Sensitivity Analysis To Project Financing Transactions

Guerra, Maria Letizia; Magni, Carlo Alberto; Stefanini, … - 2022

This paper presents a methodology which blends sensitivity analysis and fuzzy arithmetic for managing uncertainty in project financing transactions. Specifically, we adopt the perspective of the equityholders and use the average Return On Equity (ROE) to measure shareholder value creation and,...

Persistent link: https://www.econbiz.de/10013403889

Performance Attribution, Time-Weighted Rate of Return, and Clean Finite Change Sensitivity Index

Magni, Carlo Alberto; Marchioni, Andrea - 2022

We propose an innovative methodology for decomposing the value added generated by a money manager within a given assessment interval into the contributions of the manager's investment decisions made in the various periods, in order to identify the most (and the least) impactful period decisions....

Persistent link: https://www.econbiz.de/10013404532

The Term Structure of Capital Values : An Accounting-Based Framework for Measuring Economic Profitability

Magni, Carlo Alberto - 2015

This paper shows how the outputs of the accounting measurement process can be translated into terms that can be used in economic decisions. We introduce the notion of Term Structure of Capital Values (TSCV), uniquely associated to a Term Structure of Interest Rates (TSIR). We show that the state...

Persistent link: https://www.econbiz.de/10013016004