Memorias de investigación
Research Publications in journals:
Is It Correct to Use the Internal Rate of Return to Evaluate the Sustainability of Investment Decisions in Public Private Partnership Projects?
Year:2018

Research Areas
  • Land transport

Information
Abstract
Public Private Partnerships (PPP) are viewed by the private sector as investment projects. An investment criterion, such as the internal rate of return (IRR), widely used by practitioners, is thus necessary in order to determine if the opportunity is sustainable from an economic point of view and worth pursuing. However, a cash flow may have multiple IRRs?is it appropriate in the context of PPPs to use this criterion? This paper provides a clear proposition to determine the potential number of real positive IRRs a cash flow may have, depending on the number of sign variations and the value of the net present value (NPV) calculated with a discount rate equal to 0 (NPV(r = 0)). This proposition can sometimes be used when other tests (such as Norstrom?s Criterion) are inconclusive to determine if a cash flow has a single real positive IRR. The proposition is generally met by the typical cash flow of a PPP project, validating the use of IRR as an investment criterion. Es open-access. No tiene números de página, sino ID de artículo (4371)
International
Si
JCR
Si
Title
Sustainability
ISBN
2071-1050
Impact factor JCR
2,075
Impact info
Volume
10
10.3390/su10124371
Journal number
12
From page
4371-1
To page
4371-15
Month
NOVIEMBRE
Ranking
Participants

Research Group, Departaments and Institutes related
  • Creador: Grupo de Investigación: Planificación del Transporte