The purpose of this paper is to prove certain properties of the present and future values of a sequence of cash flows which have applications in the theory of capital budgeting. This is done in Theorems III, IV and V. As an introduction, certain previously available results about the present...

The paper shows the development of the after-tax earnings from interest as a function of the proportion of money invested in each type of security and certain other parameters such as the interest yields and the tax rate. This function is then differentiated and the optimum point determined. A...

The objective of this paper is to investigate the decision-making procedure for accepting or rejecting investment or financing alternatives available to the firm. The properties of the decision rules based on discounted present value and internal rate of return are studied for the class of...

We show how the value of a real option depends on corporate income taxes and the option's "debt capacity," defined as the amount of debt supported or displaced by the option. The value of the underlying asset must be an adjusted present value (APV). The risk-free rate of interest must be...