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A quarterly publication specializing in the industrial and engineering economy. Features book reviews and research regarding problems with capital investment.
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Engineering Economist back issues
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Technological breakthroughs and asset replacement.
April 1, 2009... INTRODUCTION
The article analyzes the impact of discontinuous technological change (TC) on the optimal replacement of assets (capital equipment, machines). The asset replacement under continuous TC has been intensively analyzed (see Bean et al. 1994; Bethuyne 1998; Grinyer 1973; Hartman...
Investment project valuation: a new equity perspective.
April 1, 2009... INTRODUCTION
There are two possible cases for the financing of a project: either (first case) the firm targets a fixed debt ratio and the project's debt schedule is included in the calculation of this target debt ratio or (second case) the firm targets absolute debt amounts--i.e., in...
Optimal capacity, product substitution, linear demand models, and uncertainty.
April 1, 2009... INTRODUCTION AND MOTIVATION
In today's highly uncertain marketplace, firms are increasingly resorting to flexibility, both on supply and demand sides, to effectively match their supply with demand. An example of supply-side flexibility is resource flexibility (also known as product-mix...
Considering risk within net present value: calculations for government projects.
April 1, 2009... INTRODUCTION
Net present value (NPV) is a technique that is used to assess the viability of projects based on the projected receipts and disbursements over the projects' planning horizons. It can, however, become difficult to arrive at credible single point estimates for some of these...
Technical note: waiting cost models for real options.
January 1, 2009... INTRODUCTION
The simplest form of real options is the deferral or delay option. The mathematics used are based on the financial call option. For that financial case, if the purchase of a stock is delayed and an option is purchased instead, then any dividend is lost since the stock is not...