In this paper is presented a case study realized on an enterprise which has debts to the state budget. The scope of this paper is to show how the State is able to collect its finances from the economic agents more efficient and the economic agents have the possibility to pay off their debts...

This paper presents the functional relationship between two areas of interest in contemporary behavioral economics: one concerning choices under conditions of risk, the other concerning choices in time. The paper first presents the general formula of the relationship between decision utility,...

This paper presents information on the relative valuation of fixed assets, using data from the Bureau of Economic Analysis (BEA) coupled with observed longer-run historical relationships and “stylized facts” for macroeconomic relationships in the U.S. economy. Alternative scenarios are...

It was more than four decades ago when James Tobin stressed the fallacy underlying the Latin motto "Post Hoc ergo Propter Hoc". His point was that a causal relation, back then between money and income, must rely on something more than time precedence. However, this fact has not received proper...

This paper deals with the CAPM-derived capital budgeting criterion, and in particular with Rubinstein’s (1973) criterion, according to which a project is profitable if the project rate of return is greater than the risk-adjusted cost of capital, where the latter depends on the project’s...

This paper uses counterexamples and simple formalization to show that the standard CAPM-based Net Present Value may not be used for investment valuations. The reason is that the standard CAPM-based capital budgeting criterion implies a notion of value which does not comply with the principle of...

Very large industrial real investments are different from financial investments and from small real investments, even so, their profitability is commonly valued with the same methods. A definition of a group of very large industrial real investments is made, by requiring three common...

This article shows that the Capital Asset Pricing Model-based capital budgeting criteria proposed by Tuttle and Litzenberger (1968), Mossin (1969), Hamada (1969), Stapleton (1971), Rubinstein (1973), Bierman and Hass (1973) and Bogue and Roll (1974) are equivalent. They all state that a project...

Flexibility is an important issue when investments are being planned and valued. How flexibility inherent in investments is utilised and exploited is, therefore, of great importance to the accuracy of the plans and the valuation. This paper describes an exploratory survey, done with leading...

This paper deals with the use of the CAPM for capital budgeting purposes. Four different measures are deductively drawn from this model: the disequilibrium Net Present Value, the equilibrium Net Present Value, the disequilibrium Net Future Value, the equilibrium Net Future Value. While all of...