Search results for "Passive income"
showing 5 items of 5 documents
Incentive Properties of Residual Income when There is an Option to Wait
2005
Performance measures based on residual income are increasingly popular. The academic literature shows that residual income has important incentive properties when management bases investment decisions on the net present value (NPV) rule. My analysis focuses on the case in which investment decisions can be postponed, when management must extend the simple NPV rule by considering an option value. My analysis shows that some important incentive properties of residual income still hold when there is an option to wait, but only when the residual income measure is correctly adjusted. I also provide an incentive-based explanation of why the capital charge rate within firms is often significantly h…
PERMANENT INCOME, CONVERGENCE AND INEQUALITY AMONG COUNTRIES
2008
The literature on inequality has generally focused on the analysis of annual per capita income. This paper adopts a different approach by considering the life-cycle dimension of inequality and convergence between economies from 1960 to 2000. We analyze the present value of the set of incomes individuals obtain throughout their whole life (permanent income). On the basis of this approach, various simulations are made to determine the effect on inequality in permanent income of variables such as survival rates and the long-run growth rates in current income. The results indicate that survival rates are an important source of inequality. Inequality in permanent income is about one third higher…
Housing Affordability in Metropolitan Areas. The Application of a Combination of the Ratio Income and Residual Income Approaches to Two Case Studies …
2017
Housing affordability problems have become more serious over the course of the last few decades and are now also affecting the middle-class, despite the fall in prices on the housing market. This study proposes a methodology to assess threshold-income as an index for measuring housing affordability by applying a combination of the ratio income and residual income approaches. The methodology is applied to two particular areas of Sicily in Italy as case studies consisting of medium-size metropolitan areas located in a less developed European region. The areas have been chosen on the basis of their different territorial structure: a polarized area that comprises a high-density city centre and …
Housing Affordability for Urban Regions
2021
Urban regions are recognised as driving forces of the global economy as well as the main sources of social inequality. In recent decades, particularly, housing access has become a serious problem, not only for the most disadvantaged population, but also for the middle class, as a result of economic crises and despite of prices decline in the housing market. In urban regions with high population density, some social groups face problems of housing affordability that depend not only on market prices but also on income availability. The contribution proposes a methodology for income-threshold assessment through a combination between the ratio income and the residual income approaches, which is…
Exploring the Anatomy of Franchising: A Cross-National Examination of US and Finnish Franchise Contract Provisions
2004
The present study focuses on describing and comparing the provisions of the franchise contracts and pre-sale disclosures to prospective franchisees in the USA and Finland. A fact that makes the investigation especially interesting is that no franchising specific legislation exists in Finland. Whereas in the USA franchisors are by a directive of the Federal Trade Commission required to publicly disclose key information on their franchise systems. The information is of paramount importance for potential franchisees who need to analyze franchise offering(s) before their buying decision. Two separate samples were developed for the study. The member franchisors of the International Franchise Ass…