Abstract
When estimating investment projects, traditional net present value (NPV) method ignores uncertainty and flexibility of investment project such as irreversible trait of investment project, opportunity cost of investment itself and so on. Accordingly, traditional method often results in mistaken judgment. The authors compared the application of traditional NPV method with real options in investment evaluation, analyzed the uncertainty of power grid investment project, discussed how to make the investment decision when investment cost and cash flow both are fuzzy numbers, and introduce fuzzy expectation and fuzzy variance concept to construct evaluation model. In the end authors performed a simulation to show the validity.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
