Theoretical and Applied Economics
No. 7 / 2011 (560)
Characteristics of Criteria for Selecting Investment Projects under Uncertainty
Bucharest Academy of Economic Studies
Adrian ENCIU
Bucharest Academy of Economic Studies
Dorina POANTA
Romania Banking Institute
Abstract. Within financial theory and practice, there are used five main criteria for selecting investment projects: the net present value (NPV) criterion, the internal rate of return (IRR) criterion, the return term (RT) criterion, the profitability ratio (PR) criterion and the supplementary return (SR) criterion. The assay will emphasize several new properties of said indexes for investment assessment, having as starting point the hypotheses of (approximately) normal repartition of cash-flows generated by an investment project. The obtained results point to the fact that the NPV indexes (the analysis of this criterion was carried out in the article “The NPV Criterion for Valuing Investments under Uncertainty”, Daniel Armeanu, Leonard Lache, Economic Computation and Economic Cybernetics Studies and Research no. 4/2009, pp. 133-143), IRR, PR, RT and SR register normal repartitions, therefore simplifying the investment analysis under economic uncertainty, by the capacity of building confidence intervals and assessing probabilities for the inferior limits of said investment assessment indexes.
Contents
Characteristics of Criteria for Selecting Investment Projects under Uncertainty
Online Services Management Support for an Intelligent Locality
The Meanings of “Made in Romania” among the Romanian Consumers
Forms and Strategies of the Banks to Enter on a Foreign Market
Effects of Macroeconomic Variables on the Stock Market: The Case of the Czech Republic
The European Recovery Economic Plan and Quality of Public Finances – Instruments for Monitoring and Improving Fiscal and Economic Systems
An Optimization of the Risk Management using Derivatives
Towards to the Respiritualization of the Economics
Financial Crisis from the Trust and Loss Aversion Perspective in Emerging Romanian Capital Market
The Contribution of the Neo-Schumpeterian Approach to the Development of the Economic Theory: Emphasis on the Meso-Economic Level
Dobrogea as Romanian Tourism Micro-destination
The Rethinking of the Economic Activity Based on Principles of Eco-Efficiency
The Correlation between the Conceptual System of the Political Economy and that of the Accountancy – a Solution for Reducing the Risks Connected to the Administration Activities in any Stage of the Economic