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The appraisal or the feasibility of a venture or an investment relies on the estimation of the analysis parameters, which usually occur in the future. All such estimates have an element of uncertainty which needs to be acknowledged. Traditional methods of engineering economic or discounted cash flow analysis, for example, net present value, benefit/cost ratio, internal rate of return and payback period, do not take into account the uncertainty associated with the analysis parameters. To this end, the present book proposes a number of evaluation methodologies in order to deal with the inherent…mehr

Produktbeschreibung
The appraisal or the feasibility of a venture or an investment relies on the estimation of the analysis parameters, which usually occur in the future. All such estimates have an element of uncertainty which needs to be acknowledged. Traditional methods of engineering economic or discounted cash flow analysis, for example, net present value, benefit/cost ratio, internal rate of return and payback period, do not take into account the uncertainty associated with the analysis parameters. To this end, the present book proposes a number of evaluation methodologies in order to deal with the inherent uncertainty, namely, second-order moment and Markov chains. A venture's feasibility is defined in this book as the probability of the total benefit exceeding the total cost, the probability of the internal rate of return being greater than a specified interest rate, or the probability of the payback period being less than a specified time period. The book will be found useful by those engaged in risk management and decisions associated with investments having uncertain outcomes.
Autorenporträt
Business development manager at SEDCO Real Estate Development Co., Saudi Arabia. Studied civil engineering at King Abdulaziz University, Saudi Arabia; master of engineering management at the University of Newcastle, Australia; Completed his Ph.D. in the School of Civil and Environmental Engineering at the University of New South Wales, Australia.