ECON 1 Lecture Notes - Lecture 6: Cision, Regression Analysis, Data Envelopment Analysis
Document Summary
1: the present value of the costs and future cash flows can also be used to calculate the discounted payback period, discounted payback period: the time required to break even on a project using dis- counted cash flows. If cash flows arrive in varying amounts per period, there can be multiple rates of re- turn and typical calculators and computer programs will often simply report the first. Irr that is found: discounted cash flow methods discriminate heavily against projects that are long term or risky, and the methods may fail to capture the strategic importance of the invest- ment decision. R&d investment is not independent of the investor"s behavior. Rather than simply waiting and observing the value of the investment, the investor is an active driver of the value of the investment. 2: discriminate heavily against projects that are long term or risky, and may fail to cap- ture the strategic importance of the investment decision.
