Investment Decision with Floating Rate Loan Choice Based on NPV Approach

DOI

10.2991/aebmr.k.220307.042How to use a DOI?

Keywords

Net Present Value; Floating Rate Loans; Investment Uncertainty

Abstract

The pattern of the uncertainty of cash flows and the cost of capital associated with a project plays a central role in determining whether and when this project would be undertaken. For example, the difference between hurdle rate and break-even rate may directly defer the investment decision to a later date, thus reducing a company’s current cash flows. However, once financial instruments such as floating loans or bonds as well as interest rate swaps are taken into account, investment decision-making may be expedited. As a result, the efficiency of the firm can be improved.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Chenrui Zhang
PY  - 2022
DA  - 2022/03/26
TI  - Investment Decision with Floating Rate Loan Choice Based on NPV Approach
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 270
EP  - 273
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.042
DO  - 10.2991/aebmr.k.220307.042
ID  - Zhang2022
ER  -