haku: @author Magni, C. A. / yhteensä: 1
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| Tekijä: | Magni, C. A. |
| Otsikko: | Investment decisions in the theory of finance: Some antinomies and inconsistencies |
| Lehti: | European Journal of Operational Research
2002 : FEB, VOL. 137:1, p. 206-217 |
| Asiasana: | INVESTMENT FINANCE DECISION MAKING |
| Kieli: | eng |
| Tiivistelmä: | The net-present-value rule is a pillar of modern finance theory. As known, it is a capital budgeting rule. Finance theory prescribes the investor to compare the opportunity in hand with an asset of equivalent risk, i.e. to discount cash flows with a risk-adjusted rate of return. This paper aims at showing that inconsistencies and antinomies arise when applying the above-mentioned rule. Further, it turns out that it is actually impossible to compare alternatives equivalent in risk and any decision maker cannot prevent herself to violate the above tenet. |
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