Principles of Investment Decisions

Deborah Schanz () and Sebastian Schanz ()
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Deborah Schanz: Chair of Taxation and Accounting
Sebastian Schanz: University of Magdeburg

Chapter Chapter 2 in Business Taxation and Financial Decisions, 2011, pp 11-76 from Springer

Abstract: Abstract This chapter focuses on fundamental concepts of decision making in capital budgeting and financing. These concepts – as described here – neglect taxes, but it is important to understand them to be able to follow the after-tax models in the following chapters. We assume that the content of this chapter is basically known from other courses. Therefore, we provide a very brief summary of the different concepts. Furthermore, we provide a justification for using the net present value concept as a Standard Model for investment decision problems. After reading this chapter, you are able to evaluate the profitability of different investment options. Moreover, you know the advantages and shortcomings of the decision criteria described.

Keywords: Interest Rate; Capital Market; Investment Decision; Marginal Rate; Initial Investment (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-03284-4_2

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DOI: 10.1007/978-3-642-03284-4_2

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