Open AccessA Model For Socially Responsible New Technology Decisions
Author(s) -
Dorla A. Evans,
Barry E. Langford
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v9i1.6097
Subject(s) - capital budgeting , actuarial science , capital (architecture) , economics , business , risk analysis (engineering) , computer science , operations research , microeconomics , engineering , archaeology , project appraisal , history
Firms use relatively unsophisticated techniques to incorporate the unique uncertainties associated with new technology into their capital budgeting decisions. Evidenced supports that firms would prefer to have a more accurate and standardized method to make adjustments for these uncertainties. Proposed is a method of incorporating the uncertainties of new technology into the traditional NPV calculation via the use of a specially derived risk-adjusted discount rate.