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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Description/Abstract

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.

Item Type: Article
ISSNs: 0305-0483 (print)
Related URLs:
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
ePrint ID: 35680
Date Deposited: 01 Aug 2006
Last Modified: 27 Mar 2014 18:22
URI: http://eprints.soton.ac.uk/id/eprint/35680

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