Environmental model, Performance measurement, Managerial contribution

DCF, Discounted Cashflow, Cost of Capital, Valuation

Conference summary

Incan Empire, Accounting, Double entry Bookkeeping

The arithmetic formulas appearing in the mathematics of finance are practically useless unless one has available either excellent tables and infinite patience, or working computer programs, a machine, and a budget. The present article shows how a number of useful topics in this area can be dealt with effectively by the more tractable mathematics of continuous processes. The methods yield approximate answers of high quality, and in some cases exact answers as well, with small effort, and have obvious applications in “truth in lending” investigations.

Journal Article Consistent Planning Get access R. A. Pollak R. A. Pollak University of Pennsylvania Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 35, Issue 2, April 1968, Pages 201–208, https://doi.org/10.2307/2296548 Published: 01 April 1968

Usually, installment reporting of deferred payment sales for tax purposes will result in deferral of income tax. This note is concerned with the effects of such tax deferral on company profitability and on the flow of funds under varying conditions of sales growth and terms. It is commonly recognized that, with other variables constant, installment sales are growing. However, when sales decline or stabilize following a period of growth, the result is, respectively, the reverse or neutral. Precisely the same pattern was noted in association with tax deferrals achieved by use of accelerated depreciation for tax reporting in company with growing, declining, or stable capital expenditures by a firm.' So far as we know, however, the impact of deferrals resulting from installment reporting upon the present value of company profit flows has never been made explicit. Moreover, profit margins and length of payment terms as well as growth of sales significantly affect the pattern of fund flows associated with deferrals originating from installment reporting. Normative prescriptions are not offered here. Rather, implications of the analysis are left to be read by the wide variety of persons directly concerned in policy contexts, including members of the accounting profession involved in the attempt to reach a consensus with respect to ac-

William R. Sloane, Arnold Reisman, Stock Evaluation Theory: Classification, Reconciliation, and General Model, The Journal of Financial and Quantitative Analysis, Vol. 3, No. 2 (Jun., 1968), pp. 171-204

In recent years, several case studies have been conducted on the operations of individual foreign subsidiaries of United States firms.1 While these are useful, they do not provide a means of comparing the operating characteristics of direct foreign investments as they may relate to the level of development of the countries in which they reside. There also have been some excellent comparative studies.2 These have concentrated upon comparisons of United States controlled enterprises abroad with those controlled either by other expatriate groups or by nationals. Perhaps the only intercountry comparison of the operating characteristics of United States direct foreign investments was that by Anthony Y. C. Koo.3 Koo's analysis utilized data from an Office of Business Economics survey of United States investments in Latin America. Thus it was confined to a group of countries which were all relatively less-developed (as of 1955). Because that survey did not provide country data on an industry sector basis, Koo was unable to examine for country differences within industry sectors. The purpose of this article is to partially close this gap. Our objective is to explore the question: Are the performance characteristics of direct foreign investments within industry sectors significantly influenced by the level of development of the country or region which harbor those investments? To examine this question comprehensively, it would be useful to have time series data on a large cross section of countries and several industry sectors. Data should be designed to reflect the economic contribution of investments in various sectors. We could then evaluate the extent to which there may be inherent difficulties faced by lessdeveloped countries difficulties which restrain them from fully realizing the potential contributions of direct foreign investment. To evaluate and compare the economic contribution of various sectors to the host country, it would be useful to know the effects of investments upon:

[1] Haavelmo, Trygve: Comment on Leontief, Wassily, Rates of Long-Run Economic Growth and Capital Transfer from Developed to Underdeveloped Areas, Study Week on The Econometric Approach to Development Planning (October 7-13, 1963), Pontificiae Academiae Scientiarvm Scripts Varia, (Amsterdam: North-Holland Publishing Company, 1965). [2] Chenery, Hollis and Alan M. Strout, Assistance and Economic Development, American Economic Review, 56, no. 4 (Sept. 1966), 679-733. [3] Rahman, Md. Anisur: Welfare Economics of Foreign Aid, Pakistan Development Review, Summer, 1967.