Abstract

http://ssrn.com/abstract=1936655
 


 



Note on the Mechanics of Spreadsheet-Based Simulation with Application to Project Risk Analysis


Domingo C. Joaquin


Illinois State University - Department of Finance, Insurance and Law

September 11, 2011


Abstract:     
This teaching note provides step-by-step instruction for simulating the net present value and the internal rate of return of a five-year project. The uncertainty lie in the initial level of sales, sales growth rates, gross profit margins, operating expenses before depreciation, and the terminal value multiples for net working capital and plant, property and equipment. The problem is based on the opening example in the chapter on Project Risk Analysis of Titman and Martin’s (2011) valuation text, with a multi-period version of uncertain variables added, and separate random variables representing the terminal value multiples for net working capital and plant, property and equipment.

Number of Pages in PDF File: 20

Keywords: Capital Budgeting, Financial Modeling, Risk Simulation

JEL Classification: A20, C00, G31

working papers series


Download This Paper

Date posted: October 14, 2011  

Suggested Citation

Joaquin, Domingo C., Note on the Mechanics of Spreadsheet-Based Simulation with Application to Project Risk Analysis (September 11, 2011). Available at SSRN: http://ssrn.com/abstract=1936655 or http://dx.doi.org/10.2139/ssrn.1936655

Contact Information

Domingo Castelo Joaquin (Contact Author)
Illinois State University - Department of Finance, Insurance and Law ( email )
Normal, IL 61790
United States
(309) 438-2258 (Phone)
(309) 438-5510 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 452
Downloads: 108
Download Rank: 147,320

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.281 seconds