ON FUTURE WORTH AND ITS RELATIONSHIP TO PRESENT WORTH AS AN INVESTMENT CRITERION
作者:
G. A. Fleischer,
L. C. Leung,
期刊:
The Engineering Economist
(Taylor Available online 1990)
卷期:
Volume 35,
issue 4
页码: 323-332
ISSN:0013-791X
年代: 1990
DOI:10.1080/00137919008903025
出版商: Taylor & Francis Group
数据来源: Taylor
摘要:
The present worth (PW) and future worth (FW) decision criteria are to be found in virtually all current engineering economy textbooks. Although the relationships between the internal rate of return (IRR) criterion and PW has been widely discussed in the literature, there remains some misunderstanding as to similar relationships between PW and FW. Of particular importance is the interest rates at which PW and FW are maximized. It is shown here that the maximizing rates are not necessarily equal. This leads to the seemingly peculiar result that a change in the discount rate may decrease the PW while at the same time increasing the FW, or vice versa. Numerical, mathematical and intuitive arguments are presented.
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