UTILITY OF NET PRESENT VALUE (NPV) FOR FIRMS IN TODAY’S ECONOMY

Iuliana Militaru ()
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Iuliana Militaru: Romanian-American University, Bucharest

Romanian Economic Business Review, 2016, vol. 11, issue 4, 80-84

Abstract: In last forty or so years firms made use, in their pursuit of building their investment decisions around a quantitative approach, of such an model – and respective index – as internal rate of return (IRR), and, of course, of its main derivative products of basic IRR model, such as financial IRR (FIRR), economic IRR(EIRR), sqq. This being said, quantifying a rate of returnfor any investment project is, at least sometimes, not enough; in such cases, there is still a pressing need to compute net present value of investment projects, and not only for the sake of investment strategy, but in the benefit of general development strategy of a firm.

Keywords: net present value; rate of return; investment (search for similar items in EconPapers)
Date: 2016
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