Net present value analysis and the wealth creation process: a case illustration

Jory, Surendranath, Benamraoui, Abdelhafid, Roshan Boojihawon, Devkumar and Madichie, Nnamdi O. (2016) Net present value analysis and the wealth creation process: a case illustration. The Accounting Educators Journal, 26, 85-99.

Record type: Article

Abstract

This case is intended to help students on accounting undergraduate and postgraduate courses deepen their understanding of capital budgeting. We introduce a working example and hypothetical case to show that knowing an investment project’s net present value (NPV) is important but is not sufficient. Shareholders would also like to know how and when a project pays the excess wealth it generates. In the case we show in monetary amounts, how much each group receives in every time period; how much is received in the form of excess wealth by the existing shareholders; and, when does that excess wealth starts to accrue. The case can be used specifically in the final year undergraduate and postgraduate accounting study programmes.

Text

__soton.ac.uk_UDE_PersonalFiles_Users_sb1u11_mydocuments_Academic Papers EPrints & REF_SBS Papers in ePrints_Manuscript Final Version November 2016.doc - Accepted Manuscript

Available under License University of Southampton Accepted Manuscript Licence.

Download (340kB)