Publication detail

Evaluation of Investment Risks in CBA with Monte Carlo Method

KORYTÁROVÁ, J. POSPÍŠILOVÁ, B.

Original Title

Evaluation of Investment Risks in CBA with Monte Carlo Method

Type

journal article in Scopus

Language

English

Original Abstract

Investment decisions are at the core of any development strategy. Economic growth and welfare depend on productive capital, infrastructure, human capital, knowledge, total factor productivity and the quality of institutions. Decision-making process on the selection of suitable projects in the public sector is in some aspects more difficult than in the private sector. Evaluating projects on the basis of their financial profitability, where the basic parameter is the value of the potential profit, can be misleading in these cases. One of the basic objectives of the allocation of public resources is respecting of the 3E principle (Economy, Effectiveness, Efficiency) in their whole life cycle. The life cycle of the investment projects consists of four main phases. The first pre-investment phase is very important for decision-making process whether to accept or reject a public project for its realization. A well-designed feasibility study as well as cost-benefit analysis (CBA) in this phase are important assumptions for future success of the project. A future financial and economical CF which represent the fundamental basis for calculation of economic effectiveness indicators are formed and modelled in these documents. This paper deals with the possibility to calculate the financial and economic efficiency of the public investment projects more accurately by simulation methods used.

Keywords

Public projects, EU funds,CBA,eficiency

Authors

KORYTÁROVÁ, J.; POSPÍŠILOVÁ, B.

RIV year

2015

Released

30. 3. 2015

Publisher

Mendel University in Brno

Location

Brno

ISBN

1211-8516

Periodical

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis

Year of study

63

Number

1

State

Czech Republic

Pages from

245

Pages to

251

Pages count

7

URL

http://acta.mendelu.cz/artkey/acu-201501-0031_evaluation-of-investment-risks-in-cba-with-monte-carlo-method.php

Full text in the Digital Library

http://hdl.handle.net/11012/201399

BibTex

@article{BUT113899,
  author="Jana {Korytárová} and Barbora {Janovská}",
  title="Evaluation of Investment Risks in CBA with Monte Carlo Method",
  journal="Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis",
  year="2015",
  volume="63",
  number="1",
  pages="245--251",
  doi="10.11118/actaun201563010245",
  issn="1211-8516",
  url="http://acta.mendelu.cz/artkey/acu-201501-0031_evaluation-of-investment-risks-in-cba-with-monte-carlo-method.php"
}