Decision procedures for capital rationing under conditions of risk Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/0c483p20d

Descriptions

Attribute NameValues
Creator
Abstract or Summary
  • The problem of deciding exactly how to allocate a limited amount of capital resources among competing investment alternatives in order to provide the greatest economic benefit to the business enterprise has been a subject of interest for nearly a century. Many decision models and methods for evaluation and comparison of alternatives have been described in the various business, economic, accounting, and engineering journals. The purpose of this thesis is twofold: First, to review the significant literature concerning capital budgeting written during the past 15 or 20 years, with the intent on highlighting and organizing the material. Second, to select an area within the field where little work has yet been done, or where the treatment has been less than satisfactory. In regards to the second part of the over-all objective of the thesis, the development of a game board for simulating the risk surrounding possible investment payoffs is described. A capital rationing problem containing essential elements of real-world situations is developed and described in detail. The main thrust of the present paper is a new approach to finding the "best" solution to this type of capital rationing problem encountered under conditions of risk. Drawing on basic principles of cardinal utility theory, a quantitative investment policy is presented. The investment criterion used is the before-taxes percentage rate of return; decision rules are based on an evaluation of the risk-return profile curve for each alternative under consideration. Parameter values for probability coefficients and for critical rate of return values are arbitrarily established for a hypothetical risk-seeker, risk-avoider, and risk-insensitive. The investment decisions based upon their individual risk preferences is presented for data developed in the sample problem. Finally, the results of an investigation as to how individuals actually make decisions (that is, what decision-rules they use) in problems of this type are given, and suggestions for further research are made.
Resource Type
Date Available
Date Copyright
Date Issued
Degree Level
Degree Name
Degree Field
Degree Grantor
Commencement Year
Advisor
Academic Affiliation
Non-Academic Affiliation
Subject
Rights Statement
Peer Reviewed
Language
Digitization Specifications
  • File scanned at 300 ppi (Monochrome, 8-bit Grayscale, 24-bit Color) using ScandAll PRO 1.8.1 on a Fi-6670 in PDF format. CVista PdfCompressor 5.0 was used for pdf compression and textual OCR.
Replaces
Additional Information
  • description.provenance : Approved for entry into archive by Patricia Black(patricia.black@oregonstate.edu) on 2014-01-30T21:31:46Z (GMT) No. of bitstreams: 1 NebergallDavidW1971.pdf: 2621991 bytes, checksum: 749914a5d20c711a5602e2ea5d23e5da (MD5)
  • description.provenance : Made available in DSpace on 2014-01-31T21:34:52Z (GMT). No. of bitstreams: 1 NebergallDavidW1971.pdf: 2621991 bytes, checksum: 749914a5d20c711a5602e2ea5d23e5da (MD5) Previous issue date: 1970-10-01
  • description.provenance : Submitted by Madison Medley (mmscannerosu@gmail.com) on 2014-01-30T20:53:47Z No. of bitstreams: 1 NebergallDavidW1971.pdf: 2621991 bytes, checksum: 749914a5d20c711a5602e2ea5d23e5da (MD5)
  • description.provenance : Approved for entry into archive by Katy Davis(kdscannerosu@gmail.com) on 2014-01-31T21:34:51Z (GMT) No. of bitstreams: 1 NebergallDavidW1971.pdf: 2621991 bytes, checksum: 749914a5d20c711a5602e2ea5d23e5da (MD5)

Relationships

Parents:

This work has no parents.

Last modified

Downloadable Content

Download PDF

Items