An alternative approach to capital investment appraisal.: An article from: Engineering Economist

This digital document is an article from Engineering Economist, published by Institute of Industrial Engineers, Inc. (IIE) on April 1, 2011. The length of the article is 5157 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.

From the author: The article presents an alternative and original method for establishing the present worth and feasibility of a capital investment where the underlying parameters of interest/discount rate, cash flows, and investment lifespan are uncertain. The method, based on Markov chains, complements existing and useful practices such as sensitivity analysis, Monte Carlo simulation, Hillier-style probabilistic analysis, and fuzzy sets. For the same underlying assumptions, the results of this alternative approach are the same as for these existing approaches, but the approach provides additional insight into discounted cash flow (DCF) analysis under uncertainty. The method will be found useful to persons doing investment analysis and looking at the risks associated with investment.

Citation Details
Title: An alternative approach to capital investment appraisal.
Author: David G. Carmichael
Publication:Engineering Economist (Magazine/Journal)
Date: April 1, 2011
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: 56 Issue: 2 Page: 123(17)

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