Tax paradox in NPV method

The Laspeyres-Paradox: Tax Overshifting in Nineteenth Century Prussia

126 words) Following the seminal work of late nineteenth century economist Etienne Laspeyres we analyse the incidence of the Prussian milling and slaughter tax shortly before its repeal in 1875. A comparison of flour prices in cities which levied this tax with cities that did not reveals unusually strong tax overshifting. Modern theories explain overshifting of a specific tax with quality impro...

The Laspeyres-Paradox: Tax Overshifting in 19th Century Prussia

Following the seminal work of late 19th century economist Etienne Laspeyres we analyse the incidence of the Prussian milling and butchery tax shortly before its repeal in 1875. A comparison of flour prices in cities which levied this tax with cities which did not reveals unusually strong tax overshifting. Modern theories which explain overshifting of a specific tax argue with quality improvemen...

The NPV of Bad News

We explore the effects of individualand network-level negative word-of-mouth on the firm’s profits using an agent-based model and specifically, an extended small world analysis. We include both permanent strong ties within the social network, and changing, often random, weak ties with other networks. The effect of negative word-of-mouth on the Net Present Value (NPV) of the firm was found to be...

Economic profit , NPV , and CAPM

The notion of Net Present Value (NPV) is thought to formally translate the notion of economic profit, where the discount rate is the cost of capital. The latter is the expected rate of return of an equivalent-risk alternative that the investor might undertake and is often found by making recourse to the Capital Asset Pricing Model. This paper shows that the notions of disequilibrium NPV and eco...

Philosophical Method and Galileo’s Paradox of Infinity