PROFITABILITY ASSESSMENT OF INVESTMENT PROJECTS OF DIFFERENT ECONOMIC DURATION

Authors

  • Милорад Иванишевић Faculty of Economics, Belgrade, University of Belgrade

Keywords:

unequal lived projects, cash flows, mutually exclusive projects, equivalent annual annuity, net present value, replacement chain

Abstract

When any project economical effectiveness is estimated by net present value, each project having either positive or zero net present value can be accepted provided that such project does not depend on other projects. In case of mutually exclusive projects of equal duration, the project of highest net present value will be accepted. However, in case of mutually exclusive projects of unequal duration, deciding which project is the best one is based on using various methods such as: reinvestment, cash flow method, replacement chain method and method of equivalent annual annuity.

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References

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Published

2011-02-11

How to Cite

Иванишевић, М. (2011). PROFITABILITY ASSESSMENT OF INVESTMENT PROJECTS OF DIFFERENT ECONOMIC DURATION. Acta Economica, 9(14), 69–78. Retrieved from https://ae.ef.unibl.org/index.php/AE/article/view/160

Issue

Section

Preliminary Communication