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Article
Project Appraisal under Uncertainty
Projects and Profits (2007)
  • Pankaj M Madhani
Abstract

In today’s business environment, traditional capital budgeting methods are no longer adequate to reflect the dynamic world of new economy. The typical project appraisal methods are based on Discounted Cash Flow (DCF)-based measures like Net Present Value (NPV) and Internal Rate of Return (IRR). However, they exhibit weaknesses in dealing with uncertainty, complexity and flexibility. Real options are very powerful method for evaluating project under uncertainty. Real options approach is a method of evaluating project investment decisions in an uncertain business environment.

Keywords
  • Project Appraisal,
  • NPV,
  • IRR
Publication Date
July 1, 2007
Citation Information
Pankaj M Madhani. "Project Appraisal under Uncertainty" Projects and Profits (2007)
Available at: http://works.bepress.com/madhani/27/