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| Author: | Anderson, G. A. Barber, J. R. Thurston, D. C. |
| Title: | Correction constants for present values of seasonal cash flows |
| Journal: | Decision Sciences
1997 : WINTER, VOL. 28:1, p. 225-234 |
| Index terms: | CAPITAL BUDGETING ECONOMIC ANALYSIS RESOURCE ALLOCATION |
| Language: | eng |
| Abstract: | Recently McMath (1990) developed the correction constants approach for eliminating end-of-year (EOY) bias, but a limitation of this approach is that subannual cash flows are assumed to be level. This is significant because in many types of business subannual cash flows follow a predictable seasonal pattern. Consequently a present value estimate upon a level correction constant, is biased. This article develops constants for eliminating the EOY bias in the present value of seasonal subannual cash flows. |
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