List of Figures

iii

List of Tables

iii

1.

Introduction

1

2.

Basic Capital Budgeting Model

4

2.1

Postulations

5

2.2

Method for Satisfying the Budget Constraints

8

3.

Illustrative Example

11

3.1

Net Present Worth

11

3.2

Slippage Penalties

14

3.3

The Budget Constraints

18

3.4

Process of Slippage

19

3.5

Revised Benefit/Risk Map

28

4.

Summary

33

References

35