Economic Evaluation Method Based on Rate of Return for Multiple Investment Alternatives

• 발행기관: 한국산업경영시스템학회
• 저자명: 김진욱(Jin Wook Kim)
• 간행물 정보: 『산업경영시스템학회지』제42권 제1호, 137~142쪽, 전체 6쪽
• 주제분류: 경제경영 > 경영학
• 파일형태: PDF
• 발행일자: 2019.03.28

영문 초록

There are two methods for evaluating two or more mutually exclusive projects. One is a total investment approach and the other is an incremental investment approach. The former can rank projects by the criterion of the net present value, but the latter can’t do it. An incremental investment approach is only possible when all pairwise alternatives are compared. Thus an incremental investment approach is superior in ranking them over an incremental investment approach. To do so, a principle of comparison must be established. Comparisons of profitability are reasonable when operating the same amount of investment over the same period of time. One principle is that all projects are invested in the largest of the projects. Another principle is that all projects are invested during the longest project life of the projects. In this paper, even if the principle is followed, it will be shown that the external rate of return fails to rank them. However, the productive rate of return criterion would prove to be able to rank them like the net present value standard, provided that the principle of comparison is kept. In addition, rate of returns can be assessed so that all mutually exclusive projects can be compared at once, such as on the criterion of the net present value. That is, it can be also compared with many other returns, such as the profit rates on financial investments or real investments.

목차

1. 서 론

2. 현금흐름할인법에 의한 경제성 순위매김

3. 외부수익률의 경제성 순위매김 실패

4. 생산투자수익률의 경제성 순위 매김

5. 결 론

키워드

Mutually Exclusive Projects Total Investment Approach Incremental Investment Approach Discounted Cash Flows Net Present Value Average Rate of Return Modified Rate of Return