Professors Lewellen and Edmister (L-E) are to be complimented on careful development and specification of the basic conceptual framework for an accounts-receivable control model. I consider the model to be a real contribution to the basic theory of financial management and will find it a useful supplement to my basic financial management classes.

The article presents a reply by professor Ronald V. Hartley on criticisms over the use of quadratic programming in a case of joint production. One of the cases in the author's article, "Decision Making When Joint Products Are Involved," entailed the possibility of producing a product in excess of demand. One of several alternative "uses" of this excess was to consider the creation of more demand by lowering the price. By defining some variables differently it is also possible to simplify the model. Once the optimal price and quantity have been achieved it would not be desirable to reduce the price just so that excess capacity is consumed. To do so would generate less revenue than setting a larger price with a smaller quantity sold. However, it would never be desirable to consider prices lower than the optimal since the revenue that could be generated by selecting a lower price could also be generated by selecting a higher price. At that higher price the quantity sold would consume fewer or equal resources.

This article presents information on an experiment designed to test the usefulness of an alternative accounting model to one group of users, investors in common stock. The particular model tested calls for general price-level adjustments as well as restatement of accounts to current replacement costs. Subjects were given financial statements of actual companies and were asked to specify a holding period of one, two, or three years and then select the firm which they felt would produce the highest rate of return to the investor during this period. The subjects could also indicate that the company selected would be the same regardless of whether the holding period was one, two, or three years. In addition, subjects were asked to express a measure of the confidence they had in their choices and to place a hypothetical value on the price of the companies stocks. The results were then analyzed considering both the company and the holding period selected to see if subjects using current-cost financial statements made different and better decisions than those using only historical cost financial statements.

Professors Nielsen and Melicher (N-M) have conducted well an interesting study of merger premiums as related to various measures of synergy connected with those mergers. Their study is another in a growing body of literature concerned with the merger phenomenon which increased substantially during the sixties and has continued into this decade. In order to provide an evaluation of their study, I shall consider their choice of research design and their analysis of research findings.

Journal Article International Trade Theory without Homogeneity: A Comment Get access V. Kerry Smith V. Kerry Smith Resources for the Future, Inc. Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 87, Issue 2, May 1973, Pages 288–289, https://doi.org/10.2307/1882189 Published: 01 May 1973

Richard G. Marcis, V. Kerry Smith, The Demand for Liquid Asset Balances by U.S. Manufacturing Corporations: 1959-1970, The Journal of Financial and Quantitative Analysis, Vol. 8, No. 2 (Mar., 1973), pp. 207-218

The article discusses the use of a numerical problem calling for comparative income statements and the teaching of the conceptual difference between direct and absorption costing models. It is often difficult to find a parsimonious way to introduce the student to the conceptual differences between direct and absorption costing. This is particularly true when the student is introduced first to absorption costing where the fixed overhead rate and the variable overhead rate are subsumed in the total overhead rate. Where the students have been accustomed to thinking symbolically, it is much easier to introduce these two models simultaneously. Mathematically the two components in the volume variance are not independent, and the fact that the dollar measure of the volume variance is meaningless without further analysis is clearly highlighted. This approach has been useful where the students have had a minimal introduction to algebraic logic. Its sole purpose is to clarify two relatively simple models and their impacts upon income.