Quantitative methods for capital budgeting:
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Cincinnati, Oh.
South-Western Publ.
1990
|
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Item Description: | Literaturangaben |
| Physical Description: | XIII, 285 S. graph. Darst. |
| ISBN: | 0538060808 |
Staff View
MARC
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| 100 | 1 | |a Levary, Reuven R. |e Verfasser |4 aut | |
| 245 | 1 | 0 | |a Quantitative methods for capital budgeting |c Reuven R. Levary ; Neil E. Seitz |
| 264 | 1 | |a Cincinnati, Oh. |b South-Western Publ. |c 1990 | |
| 300 | |a XIII, 285 S. |b graph. Darst. | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 500 | |a Literaturangaben | ||
| 650 | 4 | |a Mathematisches Modell | |
| 650 | 4 | |a Capital budget |x Mathematical models | |
| 650 | 4 | |a Capital investments |x Mathematical models | |
| 650 | 0 | 7 | |a Investitionsplanung |0 (DE-588)4114044-8 |2 gnd |9 rswk-swf |
| 650 | 0 | 7 | |a Mathematisches Modell |0 (DE-588)4114528-8 |2 gnd |9 rswk-swf |
| 689 | 0 | 0 | |a Investitionsplanung |0 (DE-588)4114044-8 |D s |
| 689 | 0 | 1 | |a Mathematisches Modell |0 (DE-588)4114528-8 |D s |
| 689 | 0 | |5 DE-604 | |
| 700 | 1 | |a Seitz, Neil |d 1943- |e Verfasser |0 (DE-588)122835697 |4 aut | |
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| 999 | |a oai:aleph.bib-bvb.de:BVB01-002607333 | ||
Record in the Search Index
| _version_ | 1804118390360506368 |
|---|---|
| adam_text | Contents Chapter 1: Introduction 1
1.1 Simple Capital Budgeting Decisions 2
1.2 Complex Capital Budgeting Decisions 3
1.2.1 Measurement 5
1.2.2 Multiconsideration Decision Making 6
1.3 Overview of the Book 7
Appendix 1: Time Value of Money Concepts 8
1A.1 Compound Growth of a Single Amount 8
1A.2 Present Value of a Single Amount 9
1A.3 Compound Value of a Stream of Payments 9
1A.4 Present Value of a Stream of Payments 10
1 A.5 Compounding More than Once a Period 11
1A.6 Continuous Compounding 12
1A.7 Present Values of Infinite Life Streams 13
Problems 14
Selected References 15
Chapter 2: Evaluation of Capital Investments 19
2.1 Identifying Cash Costs and Benefits 19
2.1.1 Tax Considerations 20
2.1.2 Investment Acquisition Costs 22
2.1.3 Sale of a Capital Investment 23
2.1.4 Benefits and Costs from Use of an Asset 23
2.1.5 Financing Costs 24
vii
viii Contents
2.2 Evaluation of Capital Investment Cash Flows 26
2.2.1 Net Present Value 26
2.2.2 Internal Rate of Return 30
2.2.3 Payback Period 31
2.2.4 Accounting Rate of Return 32
2.3 Ranking Capital Investments 33
2.3.1 Ranking Mutually Exclusive Projects 33
Unequal Lives and the Equivalent Annuity 35
2.4 Required Return on Investment 38
2.4.1 Cost of Debt 39
2.4.2 Cost of Preferred Stock 40
2.4.3 Cost of Common Equity 41
Dividend Growth Model 41
Mean Variance Capital Asset Pricing Model 42
Arbitrage Pricing Theory and Multifactor CAPMs 44
Cost of New Equity 44
2.4.4 The Weighted Average Cost of Capital and
Shareholder Wealth 45
2.4.5 Marginal Cost of Capital 46
2.4.6 Cost of Depreciation Generated Funds 46
2.5 Capital Rationing 49
Investment Opportunity Rate Assumptions 52
Summary 52
Problems 53
Selected References 55
Chapter 3: Single Project Risk Analysis 59
3.1 Company vs. Diversified Shareholder Perspective 60
3.1.1 Normative Goals and the Appropriate Risk Measure 60
3.1.2 Positive Analysis 61
3.2 Sensitivity Analysis 62
3.3 Probability Based Risk Measures 64
3.3.1 Standard Deviation of Net Present Value 64
3.3.2 Standard Deviation of Net Present Value of Perfectly
Correlated Cash Flows 66
3.3.3 Standard Deviation of Net Present Value of Uncorrelated
Cash Flows 68
3.3.4 Partially Correlated Cash Flows 68
Contents ix
3.3.5 Hillier Method 69
3.3.6 Conditional Probability Analysis 71
3.3.7 Simulation 73
3.3.8 Decision Trees 73
3.3.9 Standard Deviation of the Internal Rate of Return 78
3.3.10 Semivariance 79
3.3.11 Coefficient of Variation 81
3.3.12 A Caution on the Standard Deviation of the Net Present
Value 81
Summary 82
Problems 82
Selected References 84
Chapter 4: Risk from the Company and
Shareholder Perspective 89
4.1 The Company Risk Perspective: Portfolio Theory 89
4.1.1 Diversification Concepts 89
4.1.2 Measures of Risk Contribution 90
4.1.3 Basic Portfolio Theory 93
4.1.4 Portfolio Theory with More Than Two Investments 95
4.1.5 Portfolio Selection 97
4.1.6 Separation Theorem 98
4.2 Risk from the Shareholder Perspective 100
4.2.1 Mean Variance Capital Asset Pricing Model 100
Critique of the CAPM 104
4.2.2 Arbitrage Pricing Theory 105
Direct Application of Arbitrage to Capital Budgeting—
An Example 107
Summary 111
Problems 112
Selected References 114
Chapter 5: Linear Programming Models for
Capital Budgeting 119
5.1 The Linear Programming Model: An Introduction 121
5.1.1 The General Linear Programming Model 122
5.1.2 Solution of Real Life Linear Programming Problems 126
x Contents
5.2 Capital Budgeting Under Capital Rationing 128
5.2.1 Capital Budgeting Under Pure Capital Rationing, with
No Lending or Borrowing Allowed 129
The Basic Model 130
Mutually Exclusive and Contingent Projects 131
5.2.2 Capital Budgeting Where Lending Is Allowed 132
5.2.3 Capital Budgeting Where Borrowing Is Allowed 132
5.3 Capital Budgeting Where Borrowing and Lending Are Allowed 133
5.3.1 The Basic Model 133
5.3.2 Borrowing at Different Interest Rates 134
5.4 Some Comments Regarding Fractional Projects 135
5.5 Acceptability and Implementation of Quantitative Techniques 136
5.6 Illustrative Examples 137
Summary 150
Problems 150
Selected References 153
Chapter 6: Dual Linear Programming and
Capital Budgeting 155
6.1 Duality in Linear Programming: An Introduction 155
6.2 Interpretation of Dual Variables 157
6.2.1 Property 1 of Consistent Solutions 161
6.2.2 Property 2 of Consistent Solutions 163
6.2.3 Property 3 of Consistent Solutions 164
6.2.4 Property 4 of Consistent Solutions 164
6.2.5 Property 5 of Consistent Solutions 165
6.2.6 Property 6 of Consistent Solutions 165
6.2.7 Summary of Conclusions Obtained from Properties 165
6.3 Finding the Right Discount Factors 166
6.4 Illustrative Examples 167
Summary 170
Problems 170
Selected References 171
Contents xi
Chapter 7: Duality in Horizon Models for
Capital Budgeting 173
7.1 Capital Budgeting Where Lending Is Allowed 173
7.1.1 The Case Where There Are No Cash Flows Beyond the
Horizon 173
7.1.2 The Case Where There Are Cash Flows Beyond the
Horizon 176
7.2 Capital Budgeting Where Borrowing and Lending Are Allowed 177
7.2.1 The Case Where There Is No Limit on Lending or
Borrowing 177
7.2.2 The Case Where There Is Limit on Borrowing 179
7.2.3 Borrowing at Different Interest Rates 181
7.3 Illustrative Examples 182
Summary 192
Problems 192
Selected References 192
Chapter 8: Integer Programming Models for
Capital Budgeting 193
8.1 Introduction 193
8.2 The Branch and Bound Method 194
8.3 Duality and Integer Programming 196
8.4 Illustrative Examples 196
Summary 203
Problems 203
Selected References 204
Chapter 9: Goal Programming Models for
Capital Budgeting 205
9.1 Introduction to Goal Programming 206
9.1.1 Goal Programming with a Single Objective Function 206
9.1.2 Goal Programming with Multiple Objective Functions 207
xii Contents
9.2 Preemptive Goal Programming 212
9.2.1 Solutions to Preemptive Goal Programming
Problems 213
Summary 217
Problems 217
Selected References 218
Chapter 10: Simulation and Capital Budgeting 221
10.1 Introduction 221
10.2 Discrete System Simulation 224
10.2.1 Collecting and Recording Relevant Statistics 225
10.3 Determining the Distribution of Stochastic Variables 226
10.4 Random Number Generation 230
10.4.1 Uniform Random Number Generation 230
10.4.2 Continuous Uniformly Distributed Random Numbers 231
10.4.3 Generation of Random Numbers from a Population
of Integer Uniformly Distributed Numbers 232
10.4.4 Generation of Random Numbers from a Population
of Integer Nonuniformly Distributed Numbers 232
10.4.5 Generation of Normally Distributed Random Numbers 234
10.5 Simulation and Capital Budgeting 234
10.6 The Sequential Simulation Procedure 237
Summary 246
Problems 247
Selected References 247
Chapter 11: Applying Some Advanced Mathematical
Programming Models to Capital Budgeting 249
11.1 Sensitivity Analysis and Parametric Programming 249
11.2 Chance Constrained Programming 253
11.3 Quadratic Programming 262
Contents xiii
Summary 266
Problems 267
Selected References 267
Appendix Tables 269
Table A.I: Compound Value of a Single Payment 270
Table A.2: Present Value of a Single Payment 271
Table A.3: Compound Value of an Annuity 272
Table A.4: Present Value of an Annuity 273
Table A.5: Compound Value of a Single Payment,
Continuous Compounding 274
Table A.6: Present Value of $1 per Period, Continuous
Receipt and Continuous Compounding 275
Table A.7: The Standard Normal Distribution 276
Index 277
|
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| author | Levary, Reuven R. Seitz, Neil 1943- |
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| id | DE-604.BV004184136 |
| illustrated | Illustrated |
| indexdate | 2024-07-09T16:09:32Z |
| institution | BVB |
| isbn | 0538060808 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-002607333 |
| oclc_num | 19814857 |
| open_access_boolean | |
| owner | DE-739 DE-355 DE-BY-UBR DE-188 |
| owner_facet | DE-739 DE-355 DE-BY-UBR DE-188 |
| physical | XIII, 285 S. graph. Darst. |
| publishDate | 1990 |
| publishDateSearch | 1990 |
| publishDateSort | 1990 |
| publisher | South-Western Publ. |
| record_format | marc |
| spelling | Levary, Reuven R. Verfasser aut Quantitative methods for capital budgeting Reuven R. Levary ; Neil E. Seitz Cincinnati, Oh. South-Western Publ. 1990 XIII, 285 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier Literaturangaben Mathematisches Modell Capital budget Mathematical models Capital investments Mathematical models Investitionsplanung (DE-588)4114044-8 gnd rswk-swf Mathematisches Modell (DE-588)4114528-8 gnd rswk-swf Investitionsplanung (DE-588)4114044-8 s Mathematisches Modell (DE-588)4114528-8 s DE-604 Seitz, Neil 1943- Verfasser (DE-588)122835697 aut HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=002607333&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Levary, Reuven R. Seitz, Neil 1943- Quantitative methods for capital budgeting Mathematisches Modell Capital budget Mathematical models Capital investments Mathematical models Investitionsplanung (DE-588)4114044-8 gnd Mathematisches Modell (DE-588)4114528-8 gnd |
| subject_GND | (DE-588)4114044-8 (DE-588)4114528-8 |
| title | Quantitative methods for capital budgeting |
| title_auth | Quantitative methods for capital budgeting |
| title_exact_search | Quantitative methods for capital budgeting |
| title_full | Quantitative methods for capital budgeting Reuven R. Levary ; Neil E. Seitz |
| title_fullStr | Quantitative methods for capital budgeting Reuven R. Levary ; Neil E. Seitz |
| title_full_unstemmed | Quantitative methods for capital budgeting Reuven R. Levary ; Neil E. Seitz |
| title_short | Quantitative methods for capital budgeting |
| title_sort | quantitative methods for capital budgeting |
| topic | Mathematisches Modell Capital budget Mathematical models Capital investments Mathematical models Investitionsplanung (DE-588)4114044-8 gnd Mathematisches Modell (DE-588)4114528-8 gnd |
| topic_facet | Mathematisches Modell Capital budget Mathematical models Capital investments Mathematical models Investitionsplanung |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=002607333&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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