Abstract
The aim of this chapter is to propose a new approach to incorporating uncertainty into capital budgeting. The chapter presents methods that can be used by an investor when the decision maker wants to be able to make an investment decision where there are alternative investment projects. This kind of problem is undertaken under the conditions of uncertainty and risk using Ordered Fuzzy Numbers (OFN). The starting point is the concept of Ordered Fuzzy Numbers. The chapter illustrates the implementation of the proposed approach with an example where two alternative investment projects are analyzed. The authors present the capital budgeting problem using a numerical example. The described methods dedicated to investment project selection lay the foundations for a fuzzy decision-making system. We utilize computer software such as MATLAB to demonstrate how the proposed methods can be applied to assessing the profitability of alternative investment projects.
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