ESTIMATION OF INVESTMENT RETURN PERIOD (T)

• Authors: Purczynski J. , Forys I.
• Languages of publication: PL

Abstracts

EN

Return period is often used by investors as an index of investment effectiveness taking into account the time value of money. In order to determine this parameter the equation NPV=0 needs to be solved as a function of 't'. As it is shown it is an exponential equation for which no solution in an analytical form can be obtained and only iterative methods can be used: secant, tangent or bisection methods. The field literature recommends determining consecutive cash flows and comparing them with incurred expenditures (to an accuracy of a unit used for consecutive payments). The authors proposed formulas which are easy to use and burdened with small error, and which determine investment return period.

Keywords

EN

ESTIMATION ERROR; INVESTMENT; RETURN PERIODS

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Główny Urząd Statystyczny
• Journal: Przegląd Statystyczny
• Year: 2007
• Volume: 54
• Issue: 2
• Pages: 47-55
• Document type: ARTICLE

Contributors

author

Purczynski J.

author

Forys I.

• J. Purczynski, Uniwersytet Szczecinski, Wydzial Nauk Ekonomicznych i Zarzadzania, Katedra Ekonometrii i Statystyki, ul. Mickiewicza 64, 70-101 Szczecin, Poland

Identifiers

CEJSH db identifier

07PLAAAA02675461