NOTE ON “EQUIVALENCE OF CASH FLOWS WHEN COMPOUNDING OCCURS LESS FREQUENTLY THAN THE CASH FLOWS”

The present worth (PW) and future worth (FW) decision criteria are to be found in virtually all current engineering economy textbooks. Although the relationships between the internal rate of return (IRR) criterion and PW has been widely discussed in the literature, there remains some misunderstanding as to similar relationships between PW and FW. Of particular importance is the interest rates at which PW and FW are maximized. It is shown here that the maximizing rates are not necessarily equal. This leads to the seemingly peculiar result that a change in the discount rate may decrease the PW while at the same time increasing the FW, or vice versa. Numerical, mathematical and intuitive arguments are presented.     

PREPAYMENT OF INCOME TAX: A “SPREADSHEET” ANALYSIS

In their recent paper ( D. Asquith &; J.E. Bethel, “Using Heuristics to Evaluate Projects: The Case of Ranking Projects by IRR,” The Engineering Economist, Vol. 40, No. 3 (Spring 1995, pp. 287-294) ), the authors propose a project ranking procedure that is supposed to mitigate the impact of cash flow overvaluation by project managers. In the current contribution, it is indicated that this procedure is based upon a project ranking approach that employs the IRR criterion in a theoretically inadequate way. The correct, incremental approach to the IRR-based project ranking is reiterated, and it is shown that if this approach is applied, then its very design reduces the impact of CF-biases on project ranking. It is also demonstrated that even if competing projects are of equal scale, they must still be ranked by incremental comparison. Finally, it is pointed out that the incremental project ranking is the proper approach regardless of which NPV-compatible profitability measure is applied.     

OECD unbundled local loop pricing

This study examines OECD fully unbundled and line sharing monthly wholesale prices for 2002–2008. The results are informative with economic analysis appearing to inform regulator decision making. However, with the cost proxy (viz., copper-wage relative price, population density, urbanisation and business line penetration), regulator costing methods (long run incremental and fully allocated cost), and time trend arguments only explaining approximately 40% of the price variation there remains ample unexplained variation, and political and institutional variables may help reduce this. Finally, both price series are subject to increasingly rapid value declines, although the patterns are somewhat distinct. This suggests that initial prices are truly transitory.     

Relational care in communication as the basis of nonprofit fundraising: Theorizing professional ethics based in stewardship and ethics of care

At its core, fundraising is relationship building. Therefore, ethical fundraising requires cultivating genuine, care-based relationships between various stakeholders by considering relational goals and communicative practices. We advance an ethics of care-oriented approach toward fundraising based in nurturing authentic relationships with multiple organizational stakeholders, including donors, employees, beneficiaries, and volunteers. Drawing upon ethics of care and stewardship scholarship based in public relations, the purpose of this article is to propose relational care in communication through dialogue as an ethical springboard of nonprofit fundraising.     

Leadership and cooperation in growing teams

We study how the growth of teams affects leadership effectiveness and intragroup cooperation. We put experimental participants in two teams. In each team, the members voluntarily contribute to a club good. In one of the two teams, the members observe the contribution of a randomly chosen leader before they decide themselves. Two treatments allow for migration between the teams. In one of them, participants control access to their team with a voting process. By design, participants can achieve the efficient outcome only if they all move into one team. We compare the results with a leaderless setting as well as with four treatments which vary team size exogenously. The results show that high contributions of leaders encourage higher per-capita contributions of their followers which foster migration into their teams. In turn, larger teams experience even more courageous leadership and higher contributions, but the coordination effect diminishes. Nevertheless, the dismissal of potential newcomers in the treatment with voting suggests that team members see a trade-off between team size and contributions. They sacrifice economic benefits from potential entrants to maintain intrateam cooperation.