ALBERT

Notes: This paper values the real estate option to purchase contract in a contingent claims framework. The model is an application of the Black and Scholes option pricing model. Observed market data on the sale of condominiums are used to test if the option is competitively priced under various assumptions regarding the expected instantaneous variance of the condominium price. Simulation results suggest that standard industry practices of charging a fixed amount for the option to purchase roughly conform to pricing behavior dictated by the option pricing model.

Notes: This paper provides estimates of the effects of inflation in Canada on the reported rate of return in manufacturing from 1966 to 1982. It provides estimates for several different concepts of rate of return (both for all assets, whether financed by equity or debt, and for the narrower equity to the owners) and for both a narrow and wide range of financial assets. Comparisons are made with similar studies for the United Kingdom. Such studies show that reported profits are overstated and total assets are undervalued during and after periods of inflation with traditional accounting concepts relative to an economic concept designed to maintain the firm as an ongoing entity.The paper also discusses a number of factors that have contributed to the marked drop in the rate of return in Canadian manufacturing when both income and assets are valued at replacement costs. Some of these factors are also present in the other industrialized countries, such as increased raw materials prices, and a slower increase in productivity. Other factors have been relatively more important in Canada than in other countries, such as the historically higher level of production costs in Canada than in the United States and Japan, the two most important countries in Canadian trade. This is important during a period of tariff reductions when international competition in manufactured products is widespread.Although corporate profits and the adjusted profits rates of return were depressed by the severity of the 1981-82 recession, some of the key factors depressing the rates of return are longer-term in nature. A continued persistence of these factors during the balance of the 1980s could contribute to restraint in business investment in manufacturing when total returns on a replacement cost basis are so much below the corporate long-term cost of capital.This paper applies the concepts of inflation accounting to total Canadian manufacturing for the period from 1966 to 1982. Measures of rates of return for individual years are provided, both on the basis of total assets and on the basis of the net assets attributable to the owners. There are four sections in the paper after an introduction. Section 2 is a brief conceptual statement and outlines the methods. Section 3 makes comparisons with similar studies for the United Kingdom and summarizes the results of this and other studies. Section 4 discusses the environmental factors for Canadian manufacturing that appear to contribute to the lower rates of return in recent years. Section 5 discusses the implications of the results for future business decisions.

Notes: In the Netherlands the Central Bureau of Statistics (C.B.S.) carried out two experimental investigations into the possibility of observing the actual value of the capital stock by means of enquiries at enterprises.This article reports on the investigation into the cigar-industry. The intention is to carry out enquiries in one branch of industry after another. In due course (for instance after 10 years) it will again be the turn of the first branch of industry and so on. There are also branches of industry which have a fair amount of information regarding capital assets available at their disposal, so that enquiries are not necessary. In the long run the method described will supply statistical data on the value of the capital stock for all branches of industry together.The gross actual value at current and constant prices is calculated for the cigar-industry, broken down by type and vintage. The enquiry was carried out in two steps. Questionnaires were not sent to the enterprises but they were visited in order that C.B.S. staff could derive the data required from the accounts available. Within the C.B.S. this information was processed, C.B.S. staff making estimates for lacking data. It may be concluded that this method of enquiry for the capital stock is difficult but useful. The results of the enquiry are comparable throughout, the valuation having been carried out in the same way for all enterprises and care having been taken that in each enterprise all means of production were asked for.In the future this new technique of enquiry will provide good detailed information on the capital stock in the Netherlands.

Notes: The MSC proposes to end the employment quota scheme for the disabled and replace it by statutory obligation plus a code of practice. This article examines the difficulties which employers would face in demonstrating that they complied with the code and casts doubt on the benefit to the disabled themselves.

Notes: The paper addresses the question of how far precept as revealed in the academic literature on staffing of industrial R&D organizations is reflected by practice in those organizations. The author has used the opportunity afforded by discussions with twenty-five middle- and higher-management staff in laboratories in four large European companies in the petrochemical, engineering and pharmaceutical industries to obtain an overview of their staffing practices.Six aspects of staffing were enquired into: identifying and attracting persons with skills needed, selecting those satisfying organizational needs, developing the new recruit, measuring performance, appraising the individual's needs and career planning. The general impression was that the practices were remarkably similar, though some differences were observed between research- or discovery-oriented laboratories and development-oriented laboratories.When compared with well-validated generalisations in the literature firms tend to use practices judged good in the literature though there are some significant deviations especially with respect to the value of the personal interview. In some respects firms use innovative practices not yet studied by academic researchers.

Notes: The paper describes the aims and activities of the UK Government-financed programme on advanced information technology known as the Alvey Programme. Essentially, Alvey supports four areas from a total grant of 200 million spread over 5 years from 1983: software engineering, man-machine interface, VLSI and intelligent knowledge-based systems (IKBS). The whole is managed by the Alvey Directorate of which the author is a director.On IKBS the Alvey strategy is to increase university/industry collaborative research, promote markets for IKBS products and increase the supply of skilled manpower. They are financing four large-scale demonstrator projects: a speech-input work station, design-to-product system, decision-support system and mobile information systems. Each is being undertaken by a consortium of industry/academic interests. Among current smaller-scale projects are flight simulators and fault diagnosis systems for the internal combustion engine and transmissions. Another important set of activities consists in strengthening the infra-structure via standardisation of hardware, software and languages. The directorate also carries out general promotional and educational activities.

Notes: if an Expert System is to work effectively it must be fitted to its users' needs and preferences, not to its creators' convenience.The elegance of the programming language or the brilliance of the logical mechanisms will be wasted if the system is difficult to use or irrelevant in action.The capture of the knowledge when setting up an Expert System, and the use of a working system are both areas which involve Man/Machine interaction. This paper will draw attention to developments in the modelling of Human Learning Styles and Problem Solving Processes which could contribute to Knowledge Engineering methods.Models drawn from such disciplines can help the designers of Expert Systems to take account of human requirements as well as technical and logical factors. In addition, methods exist whereby the specific needs and objectives of potential users can be incorporated at the design stage, rather than as a result of criticism of systems already provided.Examples will be given of the contribution these methods are making to the progress of several Man/Machine Interface projects that the author is currently engaged upon.