The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return
This paper examines the economic content of the positive net present value of a project type that is loss-making and has two internal rates of return. The most important finding is that the economic content of a positive net present value is false in such cases. The financial source of the missing...
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| Format: | Article |
| Language: | English |
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University of Miskolc
2020-12-01
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| Series: | Theory, Methodology, Practice |
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| Online Access: | https://ojs.uni-miskolc.hu/index.php/tmp/article/view/1755 |
| _version_ | 1797648418080817152 |
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| author | Mária Illés |
| author_facet | Mária Illés |
| author_sort | Mária Illés |
| collection | DOAJ |
| description |
This paper examines the economic content of the positive net present value of a project type that is loss-making and has two internal rates of return. The most important finding is that the economic content of a positive net present value is false in such cases. The financial source of the missing amount to reach the level of business efficiency is a false interest income generated by the method. In such cases, the two internal rates of return are also derived from false interest income. The revealed and mathematically proved causality relationships usually prevail in some form in the case of other types of non-conventional cash flows as well.
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| first_indexed | 2024-03-11T15:31:55Z |
| format | Article |
| id | doaj.art-3136d48d2f734168921d5ccc519682f5 |
| institution | Directory Open Access Journal |
| issn | 1589-3413 2415-9883 |
| language | English |
| last_indexed | 2024-03-11T15:31:55Z |
| publishDate | 2020-12-01 |
| publisher | University of Miskolc |
| record_format | Article |
| series | Theory, Methodology, Practice |
| spelling | doaj.art-3136d48d2f734168921d5ccc519682f52023-10-27T04:13:06ZengUniversity of MiskolcTheory, Methodology, Practice1589-34132415-98832020-12-01160210.18096/TMP.2020.02.04The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of ReturnMária Illés0University of Miskolc This paper examines the economic content of the positive net present value of a project type that is loss-making and has two internal rates of return. The most important finding is that the economic content of a positive net present value is false in such cases. The financial source of the missing amount to reach the level of business efficiency is a false interest income generated by the method. In such cases, the two internal rates of return are also derived from false interest income. The revealed and mathematically proved causality relationships usually prevail in some form in the case of other types of non-conventional cash flows as well. https://ojs.uni-miskolc.hu/index.php/tmp/article/view/1755net present valueinternal rate of returnnon-conventional cash flowinvestment project evaluationloss-making project |
| spellingShingle | Mária Illés The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return Theory, Methodology, Practice net present value internal rate of return non-conventional cash flow investment project evaluation loss-making project |
| title | The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return |
| title_full | The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return |
| title_fullStr | The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return |
| title_full_unstemmed | The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return |
| title_short | The Positive Net Present Value of Loss-making Projects: Economic Content of the Two Internal Rates of Return |
| title_sort | positive net present value of loss making projects economic content of the two internal rates of return |
| topic | net present value internal rate of return non-conventional cash flow investment project evaluation loss-making project |
| url | https://ojs.uni-miskolc.hu/index.php/tmp/article/view/1755 |
| work_keys_str_mv | AT mariailles thepositivenetpresentvalueoflossmakingprojectseconomiccontentofthetwointernalratesofreturn AT mariailles positivenetpresentvalueoflossmakingprojectseconomiccontentofthetwointernalratesofreturn |