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Yes, absolutely. It makes no difference to the NPV framework whether you look at opportunity costs and benefits rather than absolute or net cashflows. The tricky thing here is what you then mean by the IRR/discount rate/time preference. Let’s say I am involved in international aid. I could spend a lot today in a big project that might make a big difference, ...


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For this type of analysis you'd look at the cash difference - meaning how much cash does it save by rebuilding the road versus maintaining it. The calculate the NPV of that savings, less how much it would cost to borrow the initial outlay. So if the road cost \$10 Million in year 0 to build but saved \$700,000/year in maintenance over 30 years, you'd have ...


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First, you are right that monthly return data is used. Table 1 concludes, that a one unit increase of gross profitability accounts for an additional 0.75% stock return per month after controlling for book-to-market ratio, size, stock reversal ($r_{1,0}$) and momentum ($r_{12,2}$). Table A2 is based on the following statement on p.17: Table A2 shows ...


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Expected returns or returns forecasts are not better using GARCH than ARIMA. GARCH is usefull only to predict expected return variance or future return squared. For this reason you don't find guides to compute return forecasts. You usually define your random number to have a zero mean for this reason you should only use the mean that you have. This is ...


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