Ashton, David (1978) The construction and use of mathematical programming models for the analysis of the integrated investment and financing decision within a firm. PhD thesis, University of Warwick.

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Abstract

This thesis examines the contribution that mathematical programming-models can make to the solution of the joint problem of investment and financing within a firm. In particular it contrasts the performance of rules for investment appraisal which are based on discounting methodologies with the solutions which are obtainable from linear programming models. Using a method of analysis which exploits the relationship between the primal and dual solutions in such models, it argues that there are strong theoretical reasons why linear programming models will not generate solutions which are radically different from those which can be arrived at by simple discounting procedures. It concludes that linear programming models in their current form add little to the practice of investment appraisal. It shows however, that such models provide a powerful framework for the development of normative decision rules for project appraisal within the broader context of the firm's operating environment. The impact of alternative measures of debt capacity and the effect of finite and irregular cash flow patterns on the investment decision are all considered using this framework. These ideas are then applied to the specific problem of the valuation of a financial lease contract. The final Chapter returns to the problem of using linear programming models for investment appraisal and explores one way in which they might be restructured to be of practical assistance to corporate financial planners.

Item Type:	Thesis (PhD)
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance
Library of Congress Subject Headings (LCSH):	Investments -- Mathematical models, Portfolio management -- Mathematical models, Decision making -- Mathematical models
Official Date:	June 1978
Dates:	Date Event June 1978 Submitted
Institution:	University of Warwick
Theses Department:	School of Industrial and Business Studies
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Fawthrop, Roger
Extent:	445 leaves
Language:	eng

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