Theoretical and Practical Aspects of Analysis of Investment’s Sensitivity

Radu Titus Marinescu, Madalina Gabriela Anghel and Aurelian Diaconu
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Radu Titus Marinescu: Universitatea „ARTIFEX” din Bucuresti
Madalina Gabriela Anghel: Universitatea „ARTIFEX” din Bucuresti
Aurelian Diaconu: Universitatea „ARTIFEX” din Bucuresti

Romanian Statistical Review Supplement, 2016, vol. 64, issue 8, 37-47

Abstract: In performing the analysis of an investment, an important role is played by the sensitivity degree of the project, at the investments’ design, we must take the uncertainty (risk) level into account, also the recovery mode for expenses involved etc. the impact study for an investment must take into account the also the efficiency of the project for the economic environment, and also the consequences regarding its social effect. A project is based on a series of random variables, which must be identified and included in the realized study. From the theoretical viewpoint, it also manifests the perspective of occurrence of some issues during the investment’s development. In this way, the simplest method of analysis is represented by sensitivity, which consists in the analysis of all elements that determine the value of the project, the estimation of the investment’s effect variation. The analysis must be performed in an optimistic, but also pessimistic sense, in order to identify, control and eventually reduce the risks that can occur during the investment process. In this order, we have focused on the sensitivity analysis and we have used the scenarios technique. The theoretical models identified were analysed also practically, in order to suggest essential elements that must be taken into account. The data used in the validation of the identified models were sometimes adjusted by the authors.

Keywords: uncertainty; capital; supplier; creditor; financial management; assets; liabilities (search for similar items in EconPapers)
Date: 2016
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