Lutz, Friedrich August
Princeton : University press, 1951
Abstract: This book is largely an application of the theory of capital to the individuai firm, following in the tradition of K. Wickscll and F. A. Hayek. It constitutes an extension of the theory of production, as developed by E. Schneider and S. Carlson, to include the time element. Taking the items contained in the balance sheet of the typical manufacturing firm, it analyzes the determinants of the types and amounts of assets in which the firm will invest, and the proportions in which it will ...; [Read more...]
This book is largely an application of the theory of capital to the individuai firm, following in the tradition of K. Wickscll and F. A. Hayek. It constitutes an extension of the theory of production, as developed by E. Schneider and S. Carlson, to include the time element. Taking the items contained in the balance sheet of the typical manufacturing firm, it analyzes the determinants of the types and amounts of assets in which the firm will invest, and the proportions in which it will draw its funds from alternative sources. Among the more specific problems discussed are the criterion of profit maximization, the difficulties underlying the construction of an aggregate marginal efficiency schedule, the “Ricardo effect,” the dependence of the rate of equipment installations over time on demand and cost conditions, the influence of uncertainty on the choice between equity and loan capital, and the effect of depreciation methods on balance sheet and income statementes. In the final chapter the bearing of certain parts of the analysis on interest theory is indicated. Friedrich Lutz is a professor of economics at Princeton University, and Vera Lutz is well known for her contributions to economics. (The time element in the theory of production and costs - Criteria of profit maximization - The compect of the short period - cost accouting - Goods in process: I the point input case - Goods proces. II The continuous input case - Finished goods and raw material inventoires - Durable goods: Lifetime - Durable goods: The choice of technique - Choice of technique with a rising supply of funds curve - Capital intersity and the trade cycle - Durable goods The scale of investment - The investment demand scheduble and demand for funds - Sources of funds: loans of different maturities - Treatment of risk and uncertainty - Sources of funds: Equity and loan capital - The cash balance - Assets valuation - The distinction between capital and income - Remarks on the theory of interest).
