Search

The objective of this paper is to explain how we understand business sustainability, the ethical foundation of sustainability and how all this connects with the financial objective of the firm (maximizing shareholder's wealth). Sustainable companies must be profitable, they must take care of their financial performance; moreover, the only way to meet the long-term financial objective of the firm will be to be sustainable: the result must be positive for the shareholders and for the rest of stakeholders. But for this to work, greenwashing and socialwashing must be avoided; sustainability cannot be cosmetic and therefore must be verifiable. [ABSTRACT FROM AUTHOR]

Penalized Present Value (conceived as Net present value penalization with the risk involved) can be an interesting tool when assessing risky investment decisions. On the other hand, Decision Trees appears as a technique used by practitioners for the last decades. In this paper we combine both techniques in the analysis of a complex investment decision (more specifically, a real case study related to searching for new markets) and we reach satisfactory results. The proposed methodology can be seen as a complementary alternative to Real Options analysis. [ABSTRACT FROM AUTHOR]