Financial dealer firms have invested heavily in recent years to develop information systems for risk measurement. I take it as given that technological progress is likely to continue at a rapid pace, making it less expensive for financial firms to assemble risk information. I look beyond questions of risk measurement methodology to investigate the implications of risk management information sys...

In this article we expand and improve the Internet company valuation model of Schwartz and Moon (2000) in numerous ways. By using techniques from real options theory and modern capital budgeting, the earlier paper demonstrated that uncertainty about key variables plays a major role in the valuation of high growth Internet companies. Presently, we make the model more realistic by providing for s...

The research addresses the management dilemma of a decrease in the number of capital project investments, due to the current methods of capital budgeting (i.e. net present value analysis using discounted cash flows) being ineffective, because it does not effectively deal with uncertainty in the investment, and also does take management's flexibility into account. It has been determined that a s...

Liquid assets which non-profit institutions hold are not a source of any special interests and although the close to cash assets together with credit lines available for non-profit institution are connected with resigning from realizing a part of income or costs, non-profit institutions decide to hold some liquidity reserves. This results not only from transactional needs, but also from precaut...

Our paper studies an economy in which each financial institution takes into account that if it has to sell its assets after others have already sold, the price will be lower. This causes preemptive selling, driven not by actual margin calls, but by the fear of future margin calls. Financial institutions cannot determine their optimal capitalizations in isolation, but need to know the aggregate ...

net returns is frequently discounted into perpetuity to evaluate a real estate investment alternative. The concept of expected net returns represents Capital budgeting literature suggests a number of an attempt to recognize the probabilistic nature of approaches to evaluating alternative investments. annual net returns for an investment under conditions However, use of concepts such as the payb...

The economic accuracy of accrual-based managerial performance measures is most essential for value added investment decisions in decentralised firms. Contemporary EVA-literature often lends support to annuity-based depreciation schedules for accomplishing congruence between capital budgeting criteria, like NPV, and accounting measures, like ROI and RI. This is incongruent with the principal age...

In this technical report, we study the multiple-sink fixed-charge transportation problem (MSFCTP), which arises frequently in application areas of scheduling and cost control, such as facility planning, capital budgeting, resource allocation, buffer allocation, pollution control, etc. The MSFCTP problem involves the distribution from a set of supply centers (sources) to a set of demand centers ...

We consider the internal rate of return (IRR) decision rule in capital budgeting problems with fuzzy cash flows. The possibility distribution of the IRR at any r ≥ 0, is defined to be the degree of possibility that the (fuzzy) net present value of the project with discount factor r equals to zero. We show that the possibility distribution of the IRR is a highly nonlinear function of quasi-trian...

Many business decisions involve issues that are not amenable to quantitative measures and analysis. One such domain of decisions is large-scale investments in information technology. Traditional capital budgeting methods have not proven eeective. In this paper, we present an alternative paradigm for qualitative decision analysis, embodied in the artiicial intelligence program: VOTE. We describe...