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The Discount Rate Problem in Capital Rationing Situations: Reply

Published online by Cambridge University Press:  19 October 2009

Extract

In our earlier note, we drew attention to the problem of interdependency between the opportunity cost used as a discount rate in determining the net present values of the objective function and the optimal solution of a linear program. In expanding on our article, Lockett and Tompkins (L and T) rightly point to the need for an appropriate definition of opportunity costs.

Type
Communications
Copyright
Copyright © School of Business Administration, University of Washington 1970

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