A Review of: “THE FOREIGN INVESTMENT DECISION PROCESS” by Yair Aharoni Harvard Business School - Division of Research1966, $6.00

Despite the theoretical superiority of the net present value concept, the simple payback procedure continues as a most important capital budgeting technique because of its substantial intuitive appeal (i.e.. it tells how long it takes to pay for an investment). The paper proposes a generalized time-adjusted payback decision rule which is theoretically consistent with the assumptions of the net present value capital budgeting technique, yet phrased in terms that practitioners may find more understandable.     

A Review of: “THE ANALYSIS OF MANAGEMENT DECISIONS” (Revised Edition) By William T. Morris,Richard D. Irwin,Inc., 1964 551 p. Trade $12.65 Text $9.50

This book has two very different parts. The first and main one, to page 260, evidently chiefly by Professor Jewkes, economist at Oxford University, is an argument aimed at belittling and casting doubt upon the inventiveness of the corporate laboratories; it fails. The second part, of 148 pages – more by Sawers, another English economist, and chiefly by Stillerman, a Chicago attorney – is “Summaries of Case Histories” of fifty important inventions from about the last sixty years, alphabetically arranged and including such inventions as the Ball-point pen, Freon, Cyclotron, Helicopter, Long-playing record, Synthetic detergents, and the Zipper. Eleven others are listed on page 72, and there is a chapter on nineteenth century invention, lists of inventors, etc. The histories of inventions are competent, highly factual, well documented, attentive to German, British and other foreign inventors, and can well correct our propagandized impressions that America has done it all; they are the valuable part of the book, and can serve many purposes of divers students of invention and history.     

A Review of: “THE CAPITAL BUDGETING DECISION” By Harold Bierman,Jr. and Seymour Smidt The Macmillan Company,New York,I960 246 pp. $6.00

The question posed is a complex one, and in order to clarify it the author describes the present shipping system operated by Matson. Fifteen cargo ships operate to Hawaii on a schedule of two sailings a week out of San Francisco, one sailing a week out of Los Angeles, and somewhat less frequent sailings out of Pacific Northwest ports – a total of about two hundred round trip voyages per year. Operating cost figures have shown that almost half of the total transportation costs from shippers' to consignees' doors is directly associated with cargo handling to and from the ship, and that this cost is steadily rising.     

A review of: “PLANNING THEORY” By Preston P. LeBreton & Dale A. Henning Prentice-Hall,Inc., Englewood Cliffs,N. J. 1961 357 pp.$9

Western benefit-cost analysis is assumed a viable concept for planning economic development. Such an analysis relies heavily upon a theoretical base which bears little relationship to the overall context of development decision-making. This article attempts to denote the factors that distort the theoretical results of benefit-cost analysis. The structure of the economy is shown to obviate the direct applicability of such models; and finally, the values inherent in the Western benefit-cost approach are shown to rest in the economic context where they were formulated with hidden costs for underdeveloped economies.