Rates of return and cash flow profiles: an extension

Article Abstract:

The cash recovery rate (CRR) is being used increasingly as a basis of measuring the economic rate of profitability of a firm as measured by the internal rate of return (IRR). A model of the CRR-IRR relation is developed which incorporates a concave cash flow pattern for the firm's projects. An estimate of the firm's CRR can be converted to an estimate of its IRR by using the model. IRR estimates based on the concave cash flow pattern are strongly associated with the IRR estimates based on cash flow profiles.

Accounting and auditing, Cash flow, Return on investment, Rate of return

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Anomolies in income numbers: evidence of goal oriented behavior

Article Abstract:

The frequency of certain second digits, particularly zero, is discussed for New Zealand corporate earnings figures. The occurrence is found to vary substantially from expectations. There is found a much higher than anticipated frequency of zeros, and a smaller than expected frequency of nines as the second-from-the-left most digit in earnings reported. Such an abnormality may give evidence of goal-achieving or goal-oriented behavior.

Statistics, Corporations, New Zealand, Income

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