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Looking back on the 1920's, it has become fashionable to accuse black businessmen of betraying and exploiting the Negro masses for their own gain. The career of George W. Lee, however, suggests that some black capitalists did much more than use racial pride for economic profit. They could be the real cutting edge of Negro protest, providing local leadership and a militant philosophy in a period characterized by capitulation to the white majority.
Although early British aircraft manufacturers attempted to exploit the private, civil aviation, and export markets for their products, the military market became the most important one by World War I. Mr. Fearon shows that the aircraft industry was largely dependent on military orders, but that government policy in this area tended to retard rather than promote progress and growth. It was only the optimism of the pioneer firms about the future which made the expansion of the industry possible.
The use of the expected utility hypothesis and the “portfolio approach” has recently become quite popular by both writers in monetary theory and in financial management. Most discussions are given within what might be called the Tobin-Markowitz framework. One very important result recently discussed at some length is the Tobin “separation theorem.” This theorem essentially says that a quadratic preference function, or a normal distribution of returns on risky assets is a sufficient condition for the proportions of the various risky assets in a portfolio to be independent of the proportion of the portfolio held in a safe asset. The proofs of this theorem are given within a framework of the decision maker who minimizes portfolio variance for a given portfolio return, using variance as a measure of risk of the portfolio.
The application of linear programming techniques to the problem of capital budgeting has repeatedly been proposed in the literature. However, while the potential of linear programming models for this important area of business decisions is generally recognized, practical applications still face some severe limitations. This note focuses on one particular problem peculiar to the application of programming techniques to capital budgeting, namely the mutual dependence between the optimal solution of the linear programming model and the discount rate used to calculate the coefficients of its objective function.