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Five ways to ration capital: The case of a developing economy

Authors
Journal
Journal of Policy Modeling
0161-8938
Publisher
Elsevier
Publication Date
Volume
4
Issue
3
Identifiers
DOI: 10.1016/0161-8938(82)90024-2
Disciplines
  • Computer Science
  • Political Science

Abstract

Abstract The performances of two programming models and three “simple” investment rules, the benefit-cost ratio, internal rate of return, and present value to constrained cost ratio, are compared in solving a four-year capital rationing problem in a Latin American nation. The properties and advantages of the various approaches are discussed and policy conclusions are drawn. In addition, the effects of including project timing variants and political/ bureaucratic constraints are explored.

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