Capital Budgeting: a Tax Shields’ “Mirage”?
The mainstream in Finance studies recognizes the impact of tax shields on capital budgeting. This study offers some evidences regarding a bias in direct investment projects valuation in the case of taking into account of the allowance of recovery of the losses recorded in the past financial exercise...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2011-03-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/570.pdf
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| _version_ | 1828371202715942912 |
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| author | Victor DRAGOTĂ Lucian ŢÂŢU |
| author_facet | Victor DRAGOTĂ Lucian ŢÂŢU |
| author_sort | Victor DRAGOTĂ |
| collection | DOAJ |
| description | The mainstream in Finance studies recognizes the
impact of tax shields on capital budgeting. This study offers some
evidences regarding a bias in direct investment projects valuation in the
case of taking into account of the allowance of recovery of the losses
recorded in the past financial exercises from future profits as long as the
classical indicators (e.g., Net Present Value) are used. Also, this tax
regime seems to favour the adoption of less-performer projects by lessperformer
companies, as long as these projects should be otherwise
rejected by a performer company. |
| first_indexed | 2024-04-14T06:47:29Z |
| format | Article |
| id | doaj.art-402b0e0636df4ec7b516e43445bfc316 |
| institution | Directory Open Access Journal |
| issn | 1841-8678 1844-0029 |
| language | English |
| last_indexed | 2024-04-14T06:47:29Z |
| publishDate | 2011-03-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj.art-402b0e0636df4ec7b516e43445bfc3162022-12-22T02:07:07ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292011-03-01XVIII3314018418678Capital Budgeting: a Tax Shields’ “Mirage”?Victor DRAGOTĂ0Lucian ŢÂŢU1 Bucharest Academy of Economic Studies Bucharest Academy of Economic Studies The mainstream in Finance studies recognizes the impact of tax shields on capital budgeting. This study offers some evidences regarding a bias in direct investment projects valuation in the case of taking into account of the allowance of recovery of the losses recorded in the past financial exercises from future profits as long as the classical indicators (e.g., Net Present Value) are used. Also, this tax regime seems to favour the adoption of less-performer projects by lessperformer companies, as long as these projects should be otherwise rejected by a performer company. http://store.ectap.ro/articole/570.pdf capital budgetingtax shieldsrecovery of lossesnet present valuecash flows |
| spellingShingle | Victor DRAGOTĂ Lucian ŢÂŢU Capital Budgeting: a Tax Shields’ “Mirage”? Theoretical and Applied Economics capital budgeting tax shields recovery of losses net present value cash flows |
| title | Capital Budgeting: a Tax Shields’ “Mirage”? |
| title_full | Capital Budgeting: a Tax Shields’ “Mirage”? |
| title_fullStr | Capital Budgeting: a Tax Shields’ “Mirage”? |
| title_full_unstemmed | Capital Budgeting: a Tax Shields’ “Mirage”? |
| title_short | Capital Budgeting: a Tax Shields’ “Mirage”? |
| title_sort | capital budgeting a tax shields mirage |
| topic | capital budgeting tax shields recovery of losses net present value cash flows |
| url |
http://store.ectap.ro/articole/570.pdf
|
| work_keys_str_mv | AT victordragota capitalbudgetingataxshieldsmirage AT luciantatu capitalbudgetingataxshieldsmirage |