Selection of Independent Proposals with Random Cash Flows and Limited Total Investment Capitals

Abstract:

Data and parameters of the proposals being selected may be not assured. This uncertainty of data and parameters can be expressed as random variables. The paper is about how to use random decision criteria to select independent proposals where investment capitals available are limited and cash flows or parameters are random variables. The paper first simply introduces the decision criteria on random condition, and gives the common methods to get these values of decision criteria. Then the general model of independent proposals decision with limited capital under random condition, and the solutions of proposals selection are put forward. In the last section a numeric example is given to show how to use software to select independent proposals with random cash flows and limited total investment capital.

• Periodical: Applied Mechanics and Materials (Volumes 90-93)
• Pages: 3193-3198
• DOI: https://doi.org/10.4028/www.scientific.net/AMM.90-93.3193
• Online since: September 2011
• Authors: Ya Fei Jiang
• Keywords: Economic Evaluation, Net Present Value, Random Variable

References

[1] Sanxing Zhang, etc.: Engineering Economy, edited by World Book Publications, 2005(9), pp.193-211(In Chinese)

[2] Xiaojun Liu, etc.: Engineering Economy, edited by China Building Industry Publications, 2006(7), pp.82-109(In Chinese)

[3] Chuande Chen, Mingyuan Zhang: submitted to China Journal of Highway and Transport, 2006, 19(1): pp.99-103(In Chinese)

[4] Geffrey.A.Jerry, Philip.J.Raney: Senior Microeconomics(Second Edition). Shanghai: Shanghai University of Finance and Economics Publishers, 2002(3), pp.84-101

[5] Shousheng Xiang, Yumei Shang: submitted to Business Study, 2008: pp.23-25(In Chinese)