For decision makers, we emphasize that it is feasible to consider multiple subjective criteria in a capital budgeting problem. The applicability of the procedures outlined is enhanced by the limited data base necessary to obtain subjective rankings, remembering that here we are only concerned with side criteria.In this paper, we have formulated the capital investment problem in a graph theoretic framework. We characterized the problem as being composed of a set of finite alternatives, a set of subjective criteria, and a set of resource constraints. This formulation leads to an integer programming problem in which the rankings of sets of alternatives on the multiple subjective criteria are aggregated into a single index. It is stressed that we used a single budgetary constraint in the example but that the procedure can accommodate additional constraints. We also assumed that management has specific side criteria and that it is possible for the decision makers to rank all alternatives for each of those criteria.The application of the above procedure to any problem involves three steps:1) From the decision maker, or groups of decision makers, the agreement matrix π is developed. This involves:a) defining the alternatives, b) defining the side criteria, c) asking management to rank each alternative under each criterion, andd) if appropriate, asking management to weigh the relative importance of each of the side criteria.2) From the technical considerations of the problem, determine the resource constraints. In our example, this included the investment requirements of each alternative and the total resources available.3) Solve the problem as posed above as a group of m integer programming problems.

Edgeworth series expansions are obtained of the finite sample distributions of the least squares estimator and the associated t ratio test statistic in the context of a first-order noncircular stochastic difference equation. General formulae are given for these expansions up to 0(Th1) where T is the sample size and explicit representations of these in terms of the true parameters are derived up to 0(12). Some numerical comparisons of the approximations and the exact distributions are made in the case of the least squares estimator.

This paper examines some implications of using an estimate of the variance in option valuation models. This procedure produces biased option values. It is shown that the magnitude of this bias is not large. The dispersion induced in the option price is more significant particularly for parameter values of practical interest. The nature and extent of this dispersion is examined by numerical examples. The paper suggests how a Bayesian approach could be used to cope with the estimation error.

This paper examines the stationarity of beta coefficients, especially in regard to recent, major stock market trends. In addition to the usual correlation tests for stationarity, this paper describes a more direct method for testing the stationarity of portfolio betas. The method involves the use of paired t-tests which show separately the degree of stationarity for each portfolio beta. In the process of testing for stationarity, the portfolio betas also are adjusted for measurement error using a formulation suggested by Blume [3].

Journal Article A Game of Fair Division Get access Vincent P. Crawford Vincent P. Crawford University of California, San Diego Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 2, June 1977, Pages 235–247, https://doi.org/10.2307/2297064 Published: 01 June 1977

Some corporate groups that file consolidated returns use different methods to allocate the consolidated tax liability for tax return and financial reporting purposes. Such dual allocations can cause the tax liability reported in an affiliate's financial statements to differ from the liability it reports to the Internal Revenue Service. This is not a "timing" or "permanent" difference as the terms normally are used. Differences arising from dual allocations are the focus of this paper. The paper examines the allocation of consolidated tax liabilities. An illustration is used to demonstrate the allocation methods specified for tax purposes, and the fact that the results of these methods generally do not conform to sound accounting practice is noted. An allocation method consistent with sound accounting practice then is proposed. Finally, the practice of using different allocation methods for tax and financial reporting purposes is examined, and the need for action by the accounting profession in this area is pointed out.

A variety of decision models for cost variance investigations have been suggested in the accounting literature. However, few of these models explicitly have recognized that users of these models seldom have perfect knowledge of the model parameters, particularly parameters such as the average cost when "out of control." In this paper, the issue of parameter uncertainty in cost control is addressed in two ways. First, the expected cost (or loss) arising from misestimating the parameters is estimated using two methods (numerical approximation and simulation). Then a model comparison scheme is introduced for using reported costs to make inferences about the parameters of the cost process, resulting in a "learning model" by which a manager may use an investigation to find out about the cost process, as well as to correct an out-of-control situation.

Most cost variance investigation models have considered only one cost process at a time. However, there are many reasons why cost variances from two cost processes may be correlated and why a model which exploits these commonalities may be expected to reduce expected costs. Such a model is described in this paper, and some examples are used to illustrate the effects of different factors on the cost savings.

It is widely accepted that a business entity should be able to distribute all of its net income and yet maintain its productive capacity without requiring additional capital contributions. During inflationary periods this can be accomplished by recognizing the impact of inflation in determining net income. The method suggested here accounts for a loss from. inflation as an expense, with the corresponding credits accumulated in owners' equity. The loss from inflation is calculated by multiplying the beginning balance of owners' equity by an inflation factor, which represents the change in the weighted average of prices of various goods and services used by the entity. It is demonstrated that the proposed method helps the entity to retain resources for maintaining the productive capacity in a systematic manner, and that the other methods suggested in literature (general purchasing power and replacement cost accounting) fail to achieve this purpose.

The Rule of 69, an approximation for determining the number of periods in which a sum will double at a given interest rate, was "rediscovered" in 1974. However, the rule actually was derived by an accountant in 1900. This note briefly summarizes the recent "controversy" about the Rule of 69 and mentions some of the historical implications of the 1900 paper on the subject.