Assessing a Capital Budgeting Project Under the Assumption of Uncertainty

Ing. Nadezda Komarova

Master's thesis

Abstract:

This thesis describes the evaluation of a capital budgeting project associated with a long-term investment in assets.The main part of the work is focused on risk estimation. Although conventional estimation criteria such as net present value or internal rate of return may indicate project profitability, the result of risk analysis influences the acceptance of the proposed project and should be a key criterion of the decision-making process. In this thesis we assessed a real life project in order to show the importance of the risk estimation to the decision-making process. For archiving this goal we used different risk analysis techniques such as break-even analysis, sensitivity analysis, scenario analysis and Monte Carlo simulation.

Keywords

capital budgeting, project evaluation, risk analysis, break-even analysis, sensitivity analysis, scenario analysis, Monte Carlo simulation

Jazyk práce: English

Datum vytvoření / odevzdání či podání práce: 16. 4. 2015

Obhajoba závěrečné práce

• Obhajoba proběhla 18. 6. 2015
• Vedúci: doc. Ing. Jan Vlachý, Ph.D.
• Oponent: MBA Jaromír Stemberg

University of Finance and Administration

Master programme / odbor:
Economics and Management / Business Management and Corporate Finance