ACTA WASAENSIA

ABSTRACT

Profitability in the present study is determined at the level of the firm using both the internal-rate-of-return concept and the return-on-investment concept. The relationships of these alternative profitability measurements are studied in steady-state growth process using three different depreciation theories. Fluctuations are allowed in the model, and the relationships of the average of profitabilities and the steady-state profitability are examined. Profitability is stabilized at the steady-state level by letting depreciation fluctuate appropriately.

The study is performed using a distributed lag model and usual integral calculus. The fluctuations are expressed as sinus functions in the parameters of the steady-state model. Some results are obtained at the numerical level.

The main assumptions and results are presented in chapter 1 and the study is shortly summarized in chapter 6.