1 / 6

A project is not a black box

A project is not a black box. “What is sought is found”- Sophocles, Oedipus Tyrannus. Project analysis (or understanding what makes a project tick). Sensitivity analysis Scenario analysis Break-even analysis Monte-Carlo analysis Decision Trees.

marvel
Télécharger la présentation

A project is not a black box

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. A project is not a black box “What is sought is found”- Sophocles, Oedipus Tyrannus

  2. Project analysis(or understanding what makes a project tick) • Sensitivity analysis • Scenario analysis • Break-even analysis • Monte-Carlo analysis • Decision Trees

  3. Sensitivity analysis for Jalopy Motor

  4. Break-even analysis for Jalopy Motor $ million $ million 4000 PV inflows Revenues 600 NPV = 0 PV outflows Profit = 0 2000 Costs 200 200 60 200 85 Scooter sales, 000s Scooter sales, 000s ... in terms of present values ... in terms of accounting profit

  5. Simulating a project: Step 1 Step 2 Step 3 Model the Specify Select numbers for project probabilities for forecast errors & forecast errors calculate cash flows Monte-Carlo simulation

  6. Decision treesThe electric mop example NPV = -1000 + 250/.10 = +$1500 Invest $1000 for full-scale production q Success (1/2) Don’t invest NPV = 0 l STOP Test (invest $125) NPV = -1000 + 75/.10 = -$250 Failure (1/2) Invest $1000 for full-scale production q q Don’t test Don’t invest STOP STOP NPV = 0

More Related