Author : Shlomo Reutlinger
Release : 1970
Genre : Business & Economics
Kind : eBook
Book Rating : /5 ( reviews)

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Book Synopsis Techniques for Project Appraisal Under Uncertainty by : Shlomo Reutlinger

Download or read book Techniques for Project Appraisal Under Uncertainty written by Shlomo Reutlinger. This book was released on 1970. Available in PDF, EPUB and Kindle. Book excerpt: The appraisal of events that have uncertain outcomes is discussed with particular reference to a feasible method for evaluating the riskiness of investment projects. The essence of the uncertainty problem is that many of the variables affecting the outcome of a particular plan are outside of the planner's control. Uncertainty, which is relevant for most decisions, is best characterized in terms of a decision agent's subjective beliefs about probabilities. The probabilistic approach lends itself best to an appraisal of possible outcomes of a project that is affected by uncertainties from many sources. Probability judgments about many basic variables and parameters affecting the final outcome can be aggregated into an estimate of the probability distribution of that final outcome. This aggregation method is demonstrated for calculation of the economic returns of a project. The method of approximation by a simulated sample is described, and its application to probability distribution rates of returns from actual projects is explained. The preparation of a mathematical model is detailed, emphasizing the usefulness of computerized calculations. Fourteen tables and nine figures are provided.