Open AccessA Sensitivity Analysis of a Certain Mathematical Model of Expert Evaluation of Investment Projects
Author(s) -
Данько Евгений Викторович
Publication year - 2021
Publication title -
izvestiâ altajskogo gosudarstvennogo universiteta
Language(s) - English
Resource type - Journals
eISSN - 1561-9451
pISSN - 1561-9443
DOI - 10.14258/izvasu(2021)4-14
Subject(s) - correctness , function (biology) , investment (military) , index (typography) , sensitivity (control systems) , computer science , operations research , feature (linguistics) , variable (mathematics) , mathematical model , econometrics , risk analysis (engineering) , management science , mathematics , economics , statistics , engineering , business , algorithm , mathematical analysis , linguistics , philosophy , evolutionary biology , electronic engineering , politics , world wide web , political science , law , biology
The paper presents a sensitivity analysis of the developed mathematical model of expert evaluation of investment projects. Processes of investment projects implementations are analyzed as decision-making processes under uncertainty. The mathematical model under study evaluates the effectiveness of an investment project using the NPV index. This index is considered a random variable and can be estimated by an investor as a segment [NPV1; NPV2J. The proposed mathematical model utilizes the probability density function of NPV in the form of Pearson curves of the first type. Another peculiar feature of the mathematical model is utilization of the subjective utility function in decision making of whether to invest or not to invest in some project. The subjective utility function considers individual characteristics of investors and their decision making under risks and uncertainty. Perception of additional information by investors changes depending on their attitude toward risk and missed opportunities and thus reduces uncertainty in decision making. The paper studies this step in detail and provides some conclusions proving the correctness of the developed mathematical model.