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Abstract:
This paper was prepared for the purpose of presenting the methodology and uses of the Monte Carlo simulation technique as applied in the evaluation of investment projects to analyse and assess risk. The first part of the paper highlights the importance of risk analysis in investment appraisal. The second part presents the various stages in the application of the risk analysis process. The third part examines the interpretation of the results generated by a risk analysis application including investment decision criteria and various measures of risk based on the expected value concept. The final part draws some conclusions regarding the usefulness and limitations of risk analysis in investment appraisal.

Risk Analysis, Monte Carlo simulation, Investment appraisal, Project analysis, Forecasting and simulation, Business administration

Abstract:
This paper presents how marketing concepts and tools may be applied in investment appraisal studies. The marketing evaluation process begins with a description of the project concept based on the market need the project aims to satisfy. This aids the definition of the project's relevant market and leads to an analysis of the market. The market consists of customers and competing suppliers. The project must try and match its potential capabilities to existing and potential customer needs. In doing this, the project gains competitive edge and maximizes potential performance.

Market performance is a measure of the project's ability to satisfy the key market need factors within its defined target market. The paper shows how a project analyst may evaluate a project's market performance. Such a measure may be used as an indicator of competitiveness by which to project market expansion and market share estimates. In economic analysis a market expansion, is an outward shift in the demand curve, and takes place when a project achieves a competitiveness rating higher than the level of other market competitors.

Project Appraisal, Marketing, Competitiveness, Strategy, Market Analysis

Abstract:
The paper highlights the need for a methodological framework on which to base projections in project appraisal applications. Following an initial definition and sizing of the relevant market of the project, the market is analysed in terms of which are the main customer groups, what their needs are, and how well existing suppliers serve these needs. The process should identify market performance gaps against which the project can position itself and develop relevant market competencies so that it can be assessed to be capable of out-performing competitors in meeting market expectations in a sustainable manner. This should be the essence of any project appraisal. The analyst should seek to find those elements of competitiveness that are likely to make the project a successful enterprise in its market. The quantification part of this exercise should lead to the modelling and compilation of the cash flow projections. The projected numbers should be a reflection of the competitive analysis.

Market analysis, consumer behaviour, project competitiveness, project appraisal, market competence, market positioning, marketing orientation

Abstract:
This paper presents a project evaluation study in which the methodological tools taught in the H.I.I.D. Program in Investment Appraisal and Management are applied. It examines the feasibility of a hotel project in Cyprus covering all aspects of investment appraisal. It begins with an analysis of the market for tourism in Cyprus and a definition of the project concept. The financial appraisal analyses the project cash flow from the total investment and owners' perspectives. The economic appraisal of the project is completed after working out the economic discount rate, foreign exchange premium and a series of economic conversion factors for Cyprus. The distributive analysis identifies the project externalities and shows how these may be attributed to various economic groups. Sensitivity and risk analysis further enhances the appraisal by identifying and measuring the level of uncertainty surrounding the projected results. Finally, the study considers the impact of the project on the environment.

Project Appraisal, Environment, Economic Analysis, Risk Analysis

Abstract:
This paper evaluates the strategic options available to a juice drink manufacturing company in Cyprus who is facing serious problems of survival in an aggressive and rapidly changing market environment. Following an initial screening of possible investments, based on a qualitative evaluation of the market, the two most promising strategies are formulated and appraised for financial and economic viability.

The financial appraisal analyses the projected cash flows from the owner's and total investment perspectives. The economic appraisal is then presented along with the workings for the derivation of the economic discount rate, foreign exchange premium and several economic conversion factors for Cyprus. The distributive analysis identifies the externalities generated by the two alternative strategies and allocates them to the various affected groups in the economy. The investment decision is further enhanced by the application of sensitivity and risk analysis which compares the risk profiles of the two strategies.

Project Appraisal, Environment, Economic Analysis, Risk Analysis, Competitiveness