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Cost-benefit Analysis and the Controversial Reinvestment Assumption in IRR and NPV Estimates: Some New Evidence Against Reinvestment Assumption

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  • Kannapiran C. Arjunan
  • Karthi Kannapiran

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  • Kannapiran C. Arjunan & Karthi Kannapiran, 2017. "Cost-benefit Analysis and the Controversial Reinvestment Assumption in IRR and NPV Estimates: Some New Evidence Against Reinvestment Assumption," Economic Papers, The Economic Society of Australia, vol. 36(3), pages 351-363, September.
    • Handle: RePEc:bla:econpa:v:36:y:2017:i:3:p:351-363
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    File URL: http://hdl.handle.net/10.1111/1759-3441.12179
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    1. Ezra Solomon, 1956. "The Arithmetic of Capital-Budgeting Decisions," The Journal of Business, University of Chicago Press, vol. 29, pages 124-124.
    2. Carlson, C. Robert & Lawrence, Michael L. & Wort, Donald H., 1974. "Clarification of the reinvestment assumption in capital analysis," Journal of Business Research, Elsevier, vol. 2(2), pages 201-208, April.
    3. Dudley, Carlton L, Jr, 1972. "A Note on Reinvestment Assumptions in Choosing Between Net Present Value and Internal Rate of Return," Journal of Finance, American Finance Association, vol. 27(4), pages 907-915, September.
    4. Osborne, Michael J., 2010. "A resolution to the NPV-IRR debate?," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(2), pages 234-239, May.
    5. Stephen Keef & Melvin Roush, 2001. "Discounted cash flow methods and the fallacious reinvestment assumption: a review of recent texts," Accounting Education, Taylor & Francis Journals, vol. 10(1), pages 105-116.
    6. Ignacio Velez-Pareja, 2000. "The Weighted Internal Rate of Return (WIRR) and Expanded Benefit-Cost Ratio (EB/CR)," Proyecciones Financieras y Valoración 3636, Master Consultores.
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    Cited by:

    1. Kannapiran C. Arjunan, 2019. "Non‐monotonic NPV Function Leads to Spurious NPVs and Multiple IRR Problems: A New Method that Resolves these Problems," Economic Papers, The Economic Society of Australia, vol. 38(1), pages 56-69, March.

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