Abstract
Article history: Received March 19, 2012 Received in Revised form April, 25, 2012 Accepted 29 May 2012 Available online June 2 2012 Cash flow analysis is one of the most popular methods for investigating the outcome of an economical project. The costs and benefits of a construction project are often involved with uncertainty and it is not possible to find a precise value for a particular project. In this paper, we present a simple method to calculate the net present value of a cash flow when both costs and benefits are given as triangular numbers. The proposed model of this paper uses Delphi method to figure out the fair values of all costs and revenues and then using fizzy programming techniques, it calculates the fuzzy net present value. The implementation of the proposed model is demonstrated using a simple example. © 2012 Growing Science Ltd. All rights reserved.
Highlights
During the past few years, there have been many unpleasant macro-economical events, which have influenced financial figures significantly
We present a simple method to calculate the net present value of a cash flow when both costs and benefits are given as triangular numbers
Ho and Liao (2011) presented a fuzzy method for investment project valuation in uncertain environments in terms of real options. They explained that the traditional methods were based on discounted cash flows (DCF) analysis, which were based on net present value (NPV) and internal rate of return
Summary
During the past few years, there have been many unpleasant macro-economical events, which have influenced financial figures significantly. Tsao (2012) presented a series of pragmatic algorithms to calculate NPV of capital investments in an environment, which are subject to uncertainty from randomness of outcomes and vagueness of estimation He used linguistic terms to evaluate the possibilities of future economic scenarios, and fuzzy numbers were implemented to represent the linguistic assessments and estimate cash flows and costs of capital. Ho and Liao (2011) presented a fuzzy method for investment project valuation in uncertain environments in terms of real options They explained that the traditional methods were based on discounted cash flows (DCF) analysis, which were based on NPV and internal rate of return.
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