Work

Replacement Investment: Optimal Economic Life Under Uncertainty

Year: 2004

Type: article

Abstract: Replacement investment is essentially a regenerative optimal stopping problem; that is, the key decision concerns when to terminate the life of existing plant – and hence when to start over again. This paper examines this optimisation problem within a continuous time framework and studies the qualitative and quantitative impact of uncertainty on the timing of new investment (and the criteria that should be used for terminating the life of existing plant).

Source: Journal of Business Finance &amp Accounting

DOI: 10.1111/j.0306-686x.2004.00555.x

Author: Ian M. Dobbs

Institution: Newcastle University

Language: English

Topic: Capital Investment and Risk Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2016123789

FWCI: 1.158

Cites: 20

Cited by: 44

Related to: 10