Economic risk analysis: Using analytical and Monte Carlo techniques

Brendan R. O'Donnell; Michael A. Hickner; Bruce A. Barna

Economic risk analysis: Using analytical and Monte Carlo techniques

Brendan R. O'Donnell, Michael A. Hickner, Bruce A. Barna

Materials Science and Engineering

Research output: Contribution to specialist publication › Article

4 Scopus citations

Abstract

The development and application of a Microsoft Excel spreadsheet template that facilitates analytical and Monte Carlo risk analysis of investment decisions is presented. The analytical methods use error propagation analysis to evaluate the risk involved by using statistical identities to relate the variablity of each parameter to its distribution. The Monte Carlo simulations have been used to simulate random variation in sets of related variables. The expected net present value (NPV) for the base case is found to be $1.18 MM by using the Excel template.

Original language	English (US)
Pages	94-99
Number of pages	6
Volume	36
No	2
Specialist publication	Chemical Engineering Education
State	Published - Mar 2002

All Science Journal Classification (ASJC) codes

General Chemistry
General Chemical Engineering

Cite this

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title = "Economic risk analysis: Using analytical and Monte Carlo techniques",

abstract = "The development and application of a Microsoft Excel spreadsheet template that facilitates analytical and Monte Carlo risk analysis of investment decisions is presented. The analytical methods use error propagation analysis to evaluate the risk involved by using statistical identities to relate the variablity of each parameter to its distribution. The Monte Carlo simulations have been used to simulate random variation in sets of related variables. The expected net present value (NPV) for the base case is found to be $1.18 MM by using the Excel template.",

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N2 - The development and application of a Microsoft Excel spreadsheet template that facilitates analytical and Monte Carlo risk analysis of investment decisions is presented. The analytical methods use error propagation analysis to evaluate the risk involved by using statistical identities to relate the variablity of each parameter to its distribution. The Monte Carlo simulations have been used to simulate random variation in sets of related variables. The expected net present value (NPV) for the base case is found to be $1.18 MM by using the Excel template.

AB - The development and application of a Microsoft Excel spreadsheet template that facilitates analytical and Monte Carlo risk analysis of investment decisions is presented. The analytical methods use error propagation analysis to evaluate the risk involved by using statistical identities to relate the variablity of each parameter to its distribution. The Monte Carlo simulations have been used to simulate random variation in sets of related variables. The expected net present value (NPV) for the base case is found to be $1.18 MM by using the Excel template.

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Economic risk analysis: Using analytical and Monte Carlo techniques

Abstract

All Science Journal Classification (ASJC) codes

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