Accession Number:

AD0686396

Title:

CAPITAL ACCUMULATION IN A RISKLESS ENVIRONMENT,

Descriptive Note:

Corporate Author:

CALIFORNIA UNIV LOS ANGELES WESTERN MANAGEMENT SCIENCE INST

Personal Author(s):

Report Date:

1969-03-01

Pagination or Media Count:

25.0

Abstract:

We consider the problem of making an investment decision at the beginning of each of a finite number N of time periods so as to maximize VN, the total cash on hand at time N when we have one dollar on hand at time zero. We assume that the same set of investment projects is available in each time period and that each project is riskless and divisible. The rate of growth of VN and the relaxation of the stationarity assumption are also investigated. In the last section, we assume that the income stream of each project is non-positive except for its last period. By taking a suitable transformation of the income stream and defining the internal rate of return in terms of this transformed income stream, we are able to derive the results obtained when the income stream was assumed to be nonnegative. Author

Subject Categories:

  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE