Authors: | Pflaumer, Peter |
Title: | Risk Analysis in Capital Investment Appraisal with Correlated Cash Flows: Simple Analytical Methods |
Language (ISO): | en |
Abstract: | Since uncertainty is the crucial point of a capital investment decision, risk analysis in capital budgeting is often applied. Usually risk analysis is carried out by a Monte Carlo simulation. The aim of this article is to present simple analytical methods which allow us to calculate the standard deviation of a project with correlated cash flows as a risk measure. These methods are compared with simulation procedures carried out with R, and it is shown that the proposed simple analytical methods are indeed a quick and efficient procedure for assessing the risk of an investment project where the cash flows are correlated. |
Subject Headings: | capital budgeting uncertainty finance net present value |
URI: | http://hdl.handle.net/2003/38294 http://dx.doi.org/10.17877/DE290R-20264 |
Issue Date: | 2017-07 |
Appears in Collections: | Datenanalyse |
Files in This Item:
File | Description | Size | Format | |
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PflaumerRiskAnalysis.pdf | DNB | 63.66 kB | Adobe PDF | View/Open |
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