Capital Budgeting Theory Research Articles

Mathematical Analysis of Rates of Return Under Certainty

The purpose of this paper is to prove certain properties of the present and future values of a sequence of cash flows which have applications in the theory of capital budgeting. This is done in Theorems III, IV and V. As an introduction, certain previously available results about the present value function are stated and proved as Theorems I and II. A summary of the relevance of these results in capital budgeting is given in the Summary.

A Contribution to the Theory of Capital Budgeting--The Multi-Investment Case: A Comment

A Contribution to the Theory of Capital Budgeting--The Multi-Investment Case: A Comment

A Contribution to the Theory of Capital Budgeting--The Multi-Investment Case: Reply

A Contribution to the Theory of Capital Budgeting--The Multi-Investment Case: Reply

A CONTRIBUTION TO THE THEORY OF CAPITAL BUDGETING-THE MULTI-INVESTMENT CASE*

THIS PAPER IS intended to contribute to the theory of capital budgeting by showing, conclusively, that although the cost of capital (as generally defined) is the correct cut-off point for one investment decision, it is not correct when more than one is being considered. When several investments are simultaneously evaluated, the required rate of return should be higher than the cost of capital. The authors propose for the multi-investment case, instead of using the cost of capital as a hurdle rate, the following decision-rule: Rank projects according to their rate of return, then consider each sequentially and accept the project if its contribution to the percentage increase in profits (taking into consideration all previously accepted projects) exceeds the percentage increase in equity capital required for that project.

Capital Budgeting—Theory and Practice

In the important field of capital budgeting, all too many decisions are based on questionable theses or are simply the result of educated guesswork. This exploration of the subject will help readers assess the effectiveness of tools that are currently in use.

THE COST OF CAPITAL AND OPTIMAL FINANCING OF CORPORATE GROWTH

The Journal of FinanceVolume 18, Issue 2 p. 292-310 Management of Corporate Capital THE COST OF CAPITAL AND OPTIMAL FINANCING OF CORPORATE GROWTH John Lintner, John LintnerProfessor of business administration, Graduate School of Business Administration, Harvard University.Search for more papers by this author John Lintner, John LintnerProfessor of business administration, Graduate School of Business Administration, Harvard University.Search for more papers by this author First published: May 1963 https://doi.org/10.1111/j.1540-6261.1963.tb00725.xCitations: 30 Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume18, Issue2May 1963Pages 292-310 RelatedInformation

Capital Budgeting and Game Theory

(1957). Capital Budgeting and Game Theory. The Engineering Economist: Vol. 2, No. 4, pp. 38-39.