Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)

Investment Decision with Floating Rate Loan Choice Based on NPV Approach

Authors
Chenrui Zhang1, *
1University of British Columbia, V6T 1Z4, Vancouver B.C Canada
*Corresponding author. Email: tiffanyzhang00816@gmail.com
Corresponding Author
Chenrui Zhang
Available Online 26 March 2022.
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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Volume Title
Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
26 March 2022
ISBN
10.2991/aebmr.k.220307.042
ISSN
2352-5428
DOI
10.2991/aebmr.k.220307.042How to use a DOI?
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.

Cite this article

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  -