THE RELATIVE PERFORMANCE OF DURATION IN THE CAPITAL BUDGETING SELECTION PROCESS

This paper examines the usefulness of the duration measure as a secondary ranking criterion in the capital budgeting decision environment. The potential value of the duration measure in this context is called into question through a performance comparison with other popular ranking criteria such as...

Full description

Saved in:
Bibliographic Details
Published in:The Engineering economist 1989-01, Vol.35 (1), p.67-74
Main Authors: Hawley, Delvin D., Malone, R. Phil
Format: Article
Language:English
Subjects:
Capital budgeting
Capital investments
Criteria
Discounted cash flow
Financial analysis
Internal rate of return
Mathematical models
Net present value
Payback periods
Project evaluation
Ratings & rankings
Statistical analysis
Time
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper examines the usefulness of the duration measure as a secondary ranking criterion in the capital budgeting decision environment. The potential value of the duration measure in this context is called into question through a performance comparison with other popular ranking criteria such as payback period and internal rate of return. The results of this study support the conclusion that useful information contained in the duration measure is effectively captured by the more traditional ranking criteria, and therefore inclusion of this more complex measure in the capital budget selection process is probably inefficient and unnecessary.
ISSN:0013-791X
1547-2701
DOI:10.1080/00137918908903004