Suchergebnisse

ABSTRACTThe purpose of the research was to determine the economic advantage of the accelerated depreciation procedures allowed by Revenue Procedure 67–40. This income tax procedure allows relatively free choice of depreciation method at any point in the asset's life. This choice affects two decisions. First, the decision to acquire a particular asset and second, if acquired, the depreciation method to be used for income tax purposes.A deterministic computer simulation was used to calculate the economic advantage of the new optimum procedure compared to the sum‐of‐the‐years‐digits method. The economic advantage is measured by the present worth of the depreciation tax shield. The independent variables are cost of capital, economic life, estimated salvage value, and income tax rate.The results of the simulation show that the added economic advantage of the new optimum depreciation procedure is small and is unlikely, in practical situations, to change the acquisition decision. The desirability of the new procedure for income tax purposes if the asset is acquired is less clear because the costs of using the new procedure are difficult to measure.

This paper describes an extension of the product mix problem and explicitly considers situations where demand can fluctuate over time. The additional decision variables and constraints that must be considered are described, and a revised objective function is discussed. The solution to the proposed linear programming formulation is compared to the traditional simulation and illustrates the potential for increased profits.

ABSTRACTMost of us have encountered problems in developing an effective quantitative analysis program for our business schools in the United States. We have often found managers very reluctant to adopt QA techniques; on the other hand, students, although not reluctant, lacked the necessary mathematical background.During the academic year 1970–71, the authors assisted in the development of a QA department in the business school of a developing nation which offers both resident coursework for graduate students and executives seminars for businessmen. Both the students and the executives had the necessary mathematical background for rapid understanding of QA techniques. The executives appeared eager to use QA in their business operations and the students were highly motivated toward the application of QA to business problems.Our purpose in this article is not to convince all the QA professors to teach in underdeveloped nations, but to furnish information which is likely to be useful to those who attempt to establish similar QA programs in other developing countries.