Image of Anomalies in Net Present Value, Returns and Polynomials, and Regret Theory in Decision-Making
Bookmark Share

Text

Anomalies in Net Present Value, Returns and Polynomials, and Regret Theory in Decision-Making

This book explores why Modified Internal Rate of Return (MIRR) and Net Present Value (NPV) are not necessarily accurate or efficient tools for valuation and decision-making. The author specifically addresses the biases and framing effects inherent in the NPV/MIRR/IRR model and in related approaches such as Adjusted Present Value (APV), Net Future Value (NFV), and by extension, Polynomials. In doing so, the book presents new ways of solving higher order polynomials using invariants and homomorphisms and explains why the “Fundamental Theorem of Algebra”, the Binomial Theorem and the “Descartes Sign Rule” are unreliable. Chapters also discuss how International Asset Pricing Theory (IAPT) and Intertemporal Capital Asset Pricing Models (ICAPM) can produce inaccurate results in certain circumstances. The conditions under which ICAPM and IAPT may be accurate are described; as well as why those conditions cannot, or are unlikely to, exist. The conditions under which negative interest rates may exist or are justified are also outlined. Moreover, the author explains why traditional Consumption-Savings-Investment-Production models of allocation can be inefficient, and then introduces a new model of allocation that can be applied to individuals, households and companies. Finally, the book explains why the Elasticity of Intertemporal Substitution is a flawed concept and introduces the Marginal Rate of Intertemporal Joint Substitution as a solution.

Availability

No copy data

Detail Information
Series Title
-
Call Number
332.4 NWO a
Publisher
London : Palgrave Macmillan London.,
Collation
XIII, 327
Language
English
ISBN/ISSN
978-1-137-44698-5
Classification
332.4
Content Type
text
Media Type
computer
Carrier Type
online resource
Edition
Ed. 1
Subject(s)
Mathematics in Business
Economics and Finance
Specific Detail Info
-
Statement of Responsibility
Other Information
Cataloger
umi
Source
https://link.springer.com/content/pdf/10.1057/978-1-137-44698-5.pdf?pdf=button
Validator
-
Other version/related

No other version available

File Attachment
Comments
You must be logged in to post a comment