Title
Capital budgeting with continuous cash flows: An application of calculus to managerial accounting
Abstract
Project valuation in managerial accounting often involves discounting approximately continuous cash flows. Calculus is the natural mathematical tool for dealing with continuous flows and is a required part of the business curriculum in most major universities. Typical managerial accounting textbooks provide students with little opportunity to use calculus in solving accounting problems. Discounting continuous flows is a natural medium for introducing calculus into managerial accounting courses. This article illustrates the application of calculus to capital budgeting. Explicit but simplified consideration of inflation and taxation leads to interesting conclusions while maintaining enough simplicity for upper-division managerial accounting presentation.
Department(s)
School of Accountancy
Document Type
Article
DOI
https://doi.org/10.1016/0748-5751(88)90037-1
Publication Date
1-1-1988
Recommended Citation
Nance, Jon R. "Capital budgeting with continuous cash flows: An application of calculus to managerial accounting." Journal of Accounting Education 6, no. 1 (1988): 67-81.
Journal Title
Journal of Accounting Education
