Investment analysis, both for purposes of capital expenditures and for financial investments, is based on an evaluation of cash flows. This evaluation involves the application of interest rates in order to determine whether a given option–a series of cash flows–is profitable or not. For numerous reasons, primarily that of simplicity, it has been traditional to assume that the rates of interest used to measure the worth of an investment are constant. With this assumption it is possible to equate the two familiar investment criteria when investments are independent and outlays are not subject to expenditure constraints, i.e., when capital markets are taken to be perfect in the usual sense. An investment is profitable if its net present value is positive when discounting of cash flows uses the (assumed constant) cost of capital, or if its (assumed unique) internal rate of return is greater than the cost of capital. Equivalence of these two criteria is historically most frequently identified with Irving Fisher [3, 4], and his two-period analysis, portrayed graphically, is generally utilized to establish the correctness of the equivalence of the criteria.

One of the difficulties of evaluating formula plans by testing them in the light of past experience is the fact that there is no index of bond experience which simulates typical portfolio performance. Bond indices are stated in terms of yields with constant maturities, but the capital values of bonds vary according to their maturities given the same yield. Cottle and Whitman used elaborate techniques to make their bond portion of the total portfolio realistic, but were only partially successful. This writer also attempted to eliminate the problem of simulating the bond portfolio in a previous paper by assuming that the defensive portion of the portfolio was invested in a Savings and Loan account receiving the national average return. This procedure thus ignored the problem of bond maturities and variation in capital values due to changes in interest rates.

The “burden of the debt” still appears to be a matter of concern to the United States public, economic teaching notwithstanding. In the debates preceding the 1964 tax cut, such matters as the existing budgetary deficit and the swelling public debt evoked as much passion as confusion. In this paper we intend to focus on one question: will a tax cut designed to generate a full employment equilibrium necessarily increase the debt burden, as defined by Domar. In particular, we are interested in the impact of a tax reduction on the debt burden, given that a budgetary deficit exists; and under the condition that the monetary authorities have decided to tighten credit conditions. We shall assume throughout that interest rates are determined by the monetary authorities, and that their policy is dictated by balance of payments rather than aggregate demand considerations. it will also be assumed that the tax reduction takes into account any planned increase in the rate of interest. Finally, we assume that budgetary deficits are financed by borrowing from the nonbank public and not by new money.

The problems and experiences of the largest American powder producer form an interesting case study of the effects of the Civil War upon business.

The role of “proto-factories” in the industrial development of eighteenth-century Europe is explored through comparison of three Bohemian examples.

The following brief tour through Harvard's Kress Library should acquaint scholars with that collection's unique strengths and whet their appetites for further exploration of its shelves.

In rejecting the traditional identification of the Suffolk System with Gresham's Law, this article uses economic theory to sharpen our perspective on historical business reality.