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Contribution to Book
Project Appraisal under Uncertainty: An Option Based Approach
EFFECTIVE PROJECT MANAGEMENT: Techniques and Applications (2008)
  • Pankaj M Madhani
Abstract

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. In today’s business environment, traditional capital budgeting methods are no longer adequate to reflect the dynamic world of new economy. 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
  • IRR,
  • NPV,
  • Project Appraisal
Publication Date
2008
Editor
A. Varma
Publisher
ICFAI University Press,
ISBN
9788131416280
Citation Information
Pankaj M Madhani. "Project Appraisal under Uncertainty: An Option Based Approach" firstHyderabad, IndiaEFFECTIVE PROJECT MANAGEMENT: Techniques and Applications (2008)
Available at: http://works.bepress.com/madhani/56/