Accession Number : AD0663194

Title :   CRITERIA FOR INVESTMENT SELECTION.

Descriptive Note : Technical rept.,

Corporate Author : STANFORD UNIV CALIF DEPT OF STATISTICS

Personal Author(s) : Seelefreund,Alan J.

Report Date : 27 OCT 1967

Pagination or Media Count : 22

Abstract : A scarce resource is to be periodically allocated among several investment opportunities each of which produces a payout of the same resource in future periods. Future payouts may be reinvested, the object being to maximize some measure of accumulated wealth. The maximum internal rate of return criterion and the mathematical programming approach to this problem are analyzed and under certain stability conditions are shown to agree. Under these conditions the optimal prices in the dual program must initially lie near a discount vector derived from the maximum internal rate of return which is the systems von-Neumann price vector. In this sense the maximum internal rate of return may be used as an interest rate to 'price out' the opportunities available on the planning horizon even though no external rate of interest is assumed. (Author)

Descriptors :   (*MATHEMATICAL PROGRAMMING, OPTIMIZATION), (*ECONOMICS, MATHEMATICAL MODELS), COSTS, TIME SERIES ANALYSIS, BUDGETS, MANAGEMENT PLANNING AND CONTROL, DECISION MAKING

Subject Categories : Economics and Cost Analysis
      Operations Research

Distribution Statement : APPROVED FOR PUBLIC RELEASE