LectureVI - Lecture VI Multiple Investment Problem I...

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Lecture VI: Multiple Investment Problem I. Multiple Investments A. Optimal Replacement Models Feldstien, M. S. and M. Rothschild. “Towards an Economic Theory of Optimal Replacement.” Econometrica 42(3) (May 1974). Leatham, David J. and Timothy G. Baker. “Empirical Estimates of the Effect of Inflation on Salvage Values, Costs and Optimal Replacement of Tractors and Combines.” North Central Journal of Agricultural Economics 3(2) (July 1981). Perrin, R. K. “Asset Replacement Principles.” American Journal of Agricultural Economics 54(1) (Feb. 1972). B. Bussey Chapter 8 1. The question of joint investment analysis arises because projects are mutually dependent in some fashion. The most common type of mutual dependence is probably mutual exclusion {such as the tractor replacement models.} One common form of mutual exclusion occurs with credit rationing which is a violation of perfect market assumptions. 2. Two approaches are common in the choice among multiple
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This note was uploaded on 07/15/2011 for the course AEB 6145 taught by Professor Moss during the Spring '11 term at University of Florida.

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LectureVI - Lecture VI Multiple Investment Problem I...

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