Management Science · 1966 · 14 citations · 0 references
ManagementBusiness EconomicsProject ManagementFinancial EconomicsInvestment ManagementUncertainty QuantificationInvestment AppraisalProject EvaluationProject ValuationRisk-return AnalysisSensitivity AnalysisUncertainty AnalysisInvestment Return ModelingProject Evaluation Under UncertaintyProject Life Cycle AnalysisProject Life EstimationProject Performance EvaluationProject UncertaintyProject Uncertainty AnalysisReturn On Investment
When uncertainty concerning costs, revenues, and project life exists, classical measures of capital investment return are limited in value. Sensitivity analysis indicates that relatively small over estimates and under estimates create relatively large errors in the discounted rate of return for different types of return schedules. Perhaps, then, businessmen are justified in seeking other methods of project evaluation.