Both the Royal Statistical Society and the Institute of Actuaries are interested in the collection and analysis of data and the use of the results for forecasting possible future trends. This paper deals with future traffic estimates of the number of passengers likely to use new underground railway facilities and the likely effect on the existing underground railway networks and other methods of transport, both public and private. It does not deal with the future planning of main line railway suburban services; nor does it deal with the civil engineering and operational problems of construction, although, of course, the capital cost of construction for a new tube and the capital cost of rolling stock have to be taken into account in considering the financial prospect of any new schemes.

These notes are concerned with the related subjects of expenses and their control, and forward planning in a life office. Little attention has been paid to the subject of expenses in the proceedings of either the Institute or the Students' Society in recent years, with the notable exception of the paper by Dyson and Elphinstone (1959), although expenses formed Subject 1 of the 17th International Congress. Forward planning of a life assurance company as a whole has received even less attention in our proceedings. This is in some ways not surprising since the problems are in the main managerial rather than strictly actuarial, but even if this is accepted they are nevertheless problems with which many actuaries have to deal, and this neglect is regrettable.

This paper covers a field in which few actuaries have been actively engaged in the past, namely the appraisal of proposed capital projects to determine their likely profitability. In recent years this subject has received increasing attention from the accountancy profession and from operational research practitioners. Various methods of tackling the problems have been proposed, including ‘discounted cash flow’ techniques. Most of the methods used employ compound interest and some involve probability concepts; it is surprising, therefore, that actuaries have not given the subject more attention. Furthermore, actuaries concerned with the investment of funds should also be interested in the matter from another angle: the shares which will yield the greatest return to investors may well tend to be those of the companies which carry out proper financial appraisals of the ventures in which they propose to engage.