We study the effect of financial risk on the economic evaluation of a project with capacity decisions. Capacity decisions have an important effect on the project's value through the up-front investment, the associated operating cost, and constraints on output. However, increased scale also...

Mail-order and internet sellers must decide how customers pay shipping charges. Typically, these sellers choose between two pricing policies: either “uniform pricing,” where the firm delivers to any customer at a fixed delivery charge (that may be volume dependent), or “mill pricing,”...