FUNDAMENTAREA RATEI DE CREŞTERE A FLUXURILOR DE TREZORERIE UTILIZATE ÎN EVALUAREA PROIECTELOR DE INVESTIŢII
GROWTH RATE OF CASH FLOWS ASSED IN CAPITAL BUDGETING USED IN EVALUATING INVESTMENTS PROJECTS

Summary/Abstract: In this paper we discuss models proposed in financial literature for assesing growth rate of cash flows in capital budgeting. These approaches are based on historical growth rates, estimations of financial experts or fundamentals of the company. Performing investment analysis under uncertainty, we cannot neglect serial autocorrelations between cash flows, and an adjusted growth rate is more appropriate in this situation. As the autocorrelation is stronger and the uncertainty concerning future growth rates for cash flows is higher, the adjustment becomes more important and NPV is higher than project value if uncertainty is not considered.

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