Factors affecting the different results in terms of acceptance and refusal of free cash flow to equity and free cash flow to firm in investment Cover Image

Özkaynağa Nakit Akımı ve Firmaya (Projeye) Nakit Akımı Yöntemlerinin Bir Projeye Yatırım Kararında Farklı Sonuç Vermelerini Etkileyen Faktörler
Factors affecting the different results in terms of acceptance and refusal of free cash flow to equity and free cash flow to firm in investment

Author(s): Hasan Bal
Subject(s): Economy
Published by: Orhan Sağçolak
Keywords: Capital budgeting; free cash flow to firm; free cash flow to equity.

Summary/Abstract: Decisions on whether investment projects will be invested are based on such methods as net present value and internal rate of return. These methods focus on net cash flows that will be provided throughout the economic life from the investment. In determining the cash flows there are the methods of free cash flow to firm and free cash flow to equity. In the evaluation of an investment project, each method finds the net present value with a different result. It is such that concerning some projects, while one method finds a positive net present value; the other method can find a negative net present value. This study sets out to examine the factors affecting the conflicting points of the each method, free cash flow to equity and free cash flow to firm, in the acceptance of an investment project.

  • Issue Year: 2/2010
  • Issue No: 1
  • Page Range: 21-42
  • Page Count: 22
  • Language: Turkish
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