Scinetific Problems of Modern Approach of Net Present Value
There are some scientific questions of NPV analysis, which has not been worked up. Would be useful for practice to explore the special inherence of the NPV method for making financial and management decisions, as well as for the different cash flow projects (typical that is “orthodox” and non typic...
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| Format: | Article |
| Language: | English |
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University of Miskolc
2007-02-01
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| Series: | Theory, Methodology, Practice |
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| Online Access: | https://ojs.uni-miskolc.hu/index.php/tmp/article/view/1334 |
| Summary: | There are some scientific questions of NPV analysis, which has not been worked up. Would be useful for practice to explore the
special inherence of the NPV method for making financial and management decisions, as well as for the different cash flow projects
(typical that is “orthodox” and non typical that is “unorthodox” cash flow series). There is not cleared up scientific background of
the question, why is not equal the total cost of capital for equity and for debt.
Net present value is a well-known category of economics and everyday management practice. Practical experiences show when
companies use net present value calculation several problems emerge, wrong applications are general as well as misinterpreting. A
large part of these can be due to the characteristics of the literature background. This paper intends to reveal besides these
characteristics the directions of further economic research works on this topic.
Net present value calculation has also become part of the economic school-material in the Hungarian higher education since the
second half of the 60’s. In this period we could have met several interpretational and applicational mistakes, which was typical not
only in the Hungarian but also in the international literature.
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| ISSN: | 1589-3413 2415-9883 |