Chiang, Y H; Cheng, E W L and Lam, P T I (2010) Employing the net present value-consistent IRR methods for PFI contracts. Journal of Construction Engineering and Management, 136(7), pp. 811-814. ISSN 0733-9364
Abstract
The internal rate of return (IRR) is a common financial indicator for private finance initiative (PFI) projects. Due to the long and complicated cash flow nature of PFI projects, more plausible IRR techniques are necessary for appropriate project evaluation and ranking. However, not all the published articles researching on IRR techniques are reliable. Given the importance of computing the profitability of PFI projects, this paper is intended to introduce three reliable IRR methods, which are proven to be consistent with net present value. Examples are used to illustrate their utility. The paper is of high value as it guides industry's practitioners to use proper IRR methods for selecting PFI projects. It also provides academic researchers a platform to explore more robust methods.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | decision making; financing; investments; revenues |
| Index terms: | private finance initiative, cash flow, high-value, platform, project evaluation, financing, net present value, profitability, revenue, decision-making, computing, practitioner |
| Subjects: | value management, decision analysis, computing systems, practitioner, financial management, economic analysis, contractual arrangements, digital design |
| Topics: | Project Management, Procurement, Cost Management, Business Strategy, Digital Applications, Risk Management, Roles and Professions |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here