Indian Journal of Finance
By: Associated Management Consultants (P) Ltd.Single Issue
Single Issue
- IJF-Sep08-Article3-IRR-A Blunder-What Next? But it is Still Popular-Why?
- Price : 80.00
- Published on September 1, 2008
- Associated Management Consultants (P) Ltd.
- Issues 356
- Language - English
- Published daily
About this issue
May be finance managers just enjoy living on the edge. What else would explain their weakness for using the internal rate of return (IRR) to assess capital projects? For decades, Finance textbooks and academics have warned that typical IRR calculations build in reinvestment assumptions that make bad projects look better and good ones look great. Yet, as recently as 2004, academic research found that three quarters of CFOs always or almost always use IRR when evaluating Capital projects (Anand,2002; Dedi & Orsag,2007 & Graham & Harvey, 2001).
About Indian Journal of Finance
Indian Journal of Finance, a source of sophisticated analysis of developments in the rapidly expanding world of finance, is a monthly journal with topics ranging from corporate to personal finance, insurance to financial economics and derivatives.