公司理財bondmarketandalternativeinvestmentrules(3)(編輯修改稿)
2025-01-04 22:00 本頁面
【文章內(nèi)容簡介】 ted return to attract investors： . Hence . The Liquidity Preference Hypothesis: + risk premium = f2 . In general, fn risk premium = .…………………….……(3.5),3.3 Alternative Investment Rules,How long does it take the project to “pay back” its initial investment? Payback Period = number of years to recover initial costs Minimum Acceptance Criteria: set by management Ranking Criteria: set by management,(1) The Payback Period Rule,(1) The Payback Period Rule (continued),Disadvantages: Ignores the time value of money Ignores cash flows after the payback period Biased against longterm projects Requires an arbitrary acceptance criteria A project accepted based on the payback criteria may not have a positive NPV Advantages: Easy to understand Biased toward liquidity,The Discounted Payback Period Rule,How long does it take the project to “pay back” its initial investment taking the time value of money into account? By the time you have discounted the cash flows, you might as well calculate the NPV.,(2) The Average Accounting Return Rule,Another attractive but fatally flawed approach. Ranking Criteria and Minimum Acceptance Criteria set by management Disadvantages: Ignores the time value of money Uses an arbitrary benchmark cutoff rate Based on book values, not cash flows and market values Advantages: The accounting information is usually available Easy to calculate,(3) The Internal Rate of Return (IRR) Ru
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