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Dynamic modeling of uncertainty in the planned values of investments in petrochemical and refining projects

Author

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  • Vianello, Juliano Melquiades
  • Costa, Leticia
  • Teixeira, José Paulo

Abstract

There is a large gap between the planned value of investment in a project and its financial implementation. This fact creates a mismatch between the planned and effectively achieved net present value (NPV) of the project. Considering the project portfolio of a company, this could even threaten your solvency in the future.

Suggested Citation

  • Vianello, Juliano Melquiades & Costa, Leticia & Teixeira, José Paulo, 2014. "Dynamic modeling of uncertainty in the planned values of investments in petrochemical and refining projects," Energy Economics, Elsevier, vol. 45(C), pages 10-18.
    • Handle: RePEc:eee:eneeco:v:45:y:2014:i:c:p:10-18
    DOI: 10.1016/j.eneco.2014.06.002
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    References listed on IDEAS

    as
    1. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
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    More about this item

    Keywords

    Stochastic process; Mean reversion movement; Real options; Monte Carlo simulation; Project analysis;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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