Depreciation is not only a representation of the loss in asset-value over time.It is also a strategic tool for management and can be used to minimize tax payments.In this paper we derive the depreciation scheme that minimizes the expected value of the present value of future tax payments for two...

The tax depreciation decision potentially has significant impact on the prof- itability of firms and projects. Indeed, the depreciation method chosen for tax purposes affects the timing of tax payments, and, as a consequence, it also affects the after-tax net present value of investment...

The focus of this paper is on the effect of a progressive tax system on optimal tax depreciation. By using dynamic optimization we show that an optimal strategy exists, and we provide an analytical expression for the optimal depreciation charges. Depreciation charges initially decrease over...

This paper studies how the difference between technical depreciation and tax depreciation affects the firm's optimal investment strategy. The objective is maximization of shareholder value. When tax depreciation differs from technical depreciation, an additional investment not only generates...

We present an algorithm to solve resource allocation problems with a single resource, a convex separable objective function, a convex separable resource-usage constraint and bounded variables.Through evaluation of specific functions in the lower and/or upper bounds, we obtain information on...

We consider a principal-agent setting in which a manager’s compensation de- pends on a noisy performance signal, and the manager is granted the right to choose an (accounting) method to determine the value of the performance signal. We study the effect of the degree of such reporting...

The paper deals with the issue of budget setting to the divisions of a company. The approach is quantitative in nature both in the formulation of the requirements for the set-budgets, as related to different general managerial objectives of interest, and in the modelling of the inherent...

This work deals with service provision to remote customers.Two examples are: (i) a manufacturer that has to deliver items to customers in a remote destination, and (ii) a company that provides repair and replacement service to distant clients.In both cases the remoteness of customers suggests...