Dynamic modeling of uncertainty in the planned values of investments in petrochemical and refining projects

Juliano Melquiades Vianello, Leticia Costa and José Paulo Teixeira

Energy Economics, 2014, vol. 45, issue C, 10-18

Abstract: There is a large gap between the planned value of investment in a project and its financial implementation. This fact creates a mismatch between the planned and effectively achieved net present value (NPV) of the project. Considering the project portfolio of a company, this could even threaten your solvency in the future.

Keywords: Stochastic process; Mean reversion movement; Real options; Monte Carlo simulation; Project analysis (search for similar items in EconPapers)
JEL-codes: C15 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:45:y:2014:i:c:p:10-18

DOI: 10.1016/j.eneco.2014.06.002

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