NDLI: Separation and capital budgeting decisions

Content Provider	Springer Nature Link
Author	Nitzsch, Rüdiger
Copyright Year	1997
Abstract	In dem vorliegenden Beitrag werden Bedingungen für eine Separation der Investitionsentscheidung von den Konsumpräferenzen (Fisher-Separation) in einem unvollkommenen Kapitalmarkt bei sicheren Erwartungen abgeleitet. Erfüllt die Konsumpräferenz eine bestimmte plausible Eigenschaft, die als abnehmende Konsumaustauschrate bezeichnet werden kann, ist Separation mit den folgenden beiden Bedingungen gegeben: 1. Der Zinssatz zur Transformation von Geld zwischen zwei benachbarten Zeitpunkten muß in einem bestimmten Bereich konstant sein. 2. In der bestmöglichen Ausgangssituation ohne Durchführung der Investition (dem sogenannten Basisfall) muß der Zinssatz für marginale Anlagen dem für marginale Verschuldungen entsprechen. Ein interessantes Nebenergebnis der Analyse ist, daß ein Projekt A mit einem höheren Kapital- und Endwert als B auch bei Einschränkung auf plausible Konsumpräferenzen nicht immer gegenüber B zu bevorzugen ist.We prove conditions for a Fisher-separation in an imperfect capital market. If the investor has a decreasing exchange rate in consumption it is shown that two conditions are sufficient to imply separation. The first condition requires that in a certain range there is only one price (interest rate) to transfer money between two time periods. The second condition requires that in the base case the interest rate for marginal financial investments is the same as for marginal debts. We introduce a capital budgeting method which takes advantage of this conditions. An interesting result is that a project A with a higher present value and a higher terminal value than B is not always better than B.
Starting Page	55
Ending Page	65
Page Count	11
File Format	PDF
ISSN	01716468
Journal	OR Spectrum
Volume Number	19
Issue Number	1
e-ISSN	14366304
Language	English
Publisher	Springer Berlin Heidelberg
Publisher Date	1997-03-01
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Fisher-separation capital budgeting present value discount rate Operation Research/Decision Theory Calculus of Variations and Optimal Control; Optimization Business and Management
Content Type	Text
Resource Type	Article
Subject	Management Science and Operations Research Business, Management and Accounting

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

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