Open AccessCOMPARISON OF LEASING AND LOAN WITH CIR-MODEL
Author(s) -
Антон Белов,
Антон Белов
Publication year - 2017
Publication title -
russian journal of management
Language(s) - English
Resource type - Journals
eISSN - 2500-1469
pISSN - 2409-6024
DOI - 10.12737/article_5953689ab1ec19.53023566
Subject(s) - cash flow , loan , finance , valuation (finance) , cash management , bond , investment (military) , business , actuarial science , economics , politics , political science , law
In the implementation of capital investment in the modernization
of enterprise production management it is important to
make an informed decision about choosing a source of financing
for such investments. One of the most common sources of financing
is the long-term bank loan and leasing. To substantiate the
choice of one of these sources it is necessary to determine the most
effective of them, that is, given that the effectiveness of the project
does not depend on the method of financing, the cash flow of that
will be more attractive. In this article, the author builds two models
of cash flow estimates arising from the implementation of the project
financing each of these methods. The first model is a classic
calculation of NPV, and the second model is developed by the author
based on the zero-coupon bonds stochastic valuation model
of Cox-Ingersoll-Ross.