Influence of the Post-Crisis Situation on Cost of Capital and Intrinsic Liquidity Value in Non-Profit Organizations
International Journal of Management and Social Sciences (IJMSS), Vol. 1, No. 1, pp. 67-78, July 2011
20 Pages Posted: 22 Aug 2011 Last revised: 1 Mar 2015
Date Written: December 21, 2012
Cash maintained in nonprofit organizations is not a source of any interest and although the close to cash assesses together with credit lines available for enterprise are connected with resigning from realization of the part of incomes or costs, firms decide to maintain some liquidity reserves. Not only this, resulting from transactional needs, but also from precautional and speculative reasons. Investment in liquid reserves resulting from speculative demand for money may be assessed by usage of capital budgeting methods like: Net Present Value (NPV) or Internal Rate of Return (IRR) or as a call option.
In the research paper, each of these aspects of liquidity was taken into consideration and presented from nonprofit perspective. Nonprofit liquidity value determination may often significantly contribute to the solution of working capital management problems in these organizations.
Keywords: Intrinsic Liquidity Value, Nonprofit Financial Management, Financial Liquidity, Liquidity, Financial Management
JEL Classification: G31, L31, M21
Suggested Citation: Suggested Citation