Two phase parametric and probabilistic NPV calculations, with possible deferral of disposal of UK nuclear waste as an example
Chapman, Chris B. and Howden, Mike (1997) Two phase parametric and probabilistic NPV calculations, with possible deferral of disposal of UK nuclear waste as an example. Omega, 25, (6), 707-714. (doi:10.1016/S0305-0483(97)00026-1).
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This paper illustrates the value of several particular features of a first phase parametric approach to discounted cash flow (DCF) decision analysis when significant uncertainty is involved. It also illustrates the value of second phase probabilistic approaches to selected parameters for five quite different example reasons. The most controversial example reason concerns the discount rate. The particular example used to illustrate both phases may stimulate general interest because of the important issues involved, but it is argued that the two phase approach as a whole has a wide range of applications for decisions large and small.
|Keywords:||capital budgeting, risk analysis, parametric analysis|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management|
|Divisions:||University Structure - Pre August 2011 > School of Management
|Date Deposited:||01 Aug 2006|
|Last Modified:||27 Mar 2014 18:22|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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