It is well known that mathematical conditions are not sufficient to recover the financial rate of return anomalies in investment projects, when we have multiple roots. In this note, an ex-post agricultural investment with multiple roots co-financed by EU funds is investigated to recover the uniqueness and the economic meaning of the rate of return associated to the project. Our results show that methodological issues become relevant for policy-makers when public institutions use selective thresholds in their decision-making thus suggesting that financing operations make the correctness of evaluating the ROR questionable.
A note on Internal rate of return
PIERONI, Luca;POLINORI, Paolo
2005
Abstract
It is well known that mathematical conditions are not sufficient to recover the financial rate of return anomalies in investment projects, when we have multiple roots. In this note, an ex-post agricultural investment with multiple roots co-financed by EU funds is investigated to recover the uniqueness and the economic meaning of the rate of return associated to the project. Our results show that methodological issues become relevant for policy-makers when public institutions use selective thresholds in their decision-making thus suggesting that financing operations make the correctness of evaluating the ROR questionable.File in questo prodotto:
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