The importance of specifying and quantifying the project risks in the investment decision process cannot be overemphasized. Even more so in the context of marine project appraisal, since the shiping markets are characterized by extreme volatility and high cyclicality. The use of probability theory in investment decisions is reviewed and applications are derived for marine projects. The paper focuses on the use of Monte Carlo simulation to determine the mean and variance of the input variables. Within the Monte Carlo framework three alternative methods are used for the construction of probability distributions; the scaled halves of a normal distribution, two unscaled parts of a normal distribution and finally use of altenative distributions, such as beta, gamma and chi-square. An alternative methodology is also drawn from the literature, namely the Pearson-Turkey three point approximation, to contrast with the Monte Carlo method.


    Access

    Check access

    Check availability in my library

    Order at Subito €


    Export, share and cite



    Title :

    Application of probability theory to marne project appraisal


    Contributors:

    Published in:

    Publication date :

    1994-01-01


    Size :

    21 pages




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    Unknown



    Applications of probability theory to marine project appraisal

    Papadopoulos, P.A. | Online Contents | 1994


    Trials of "Marne Lloyd"

    Engineering Index Backfile | 1957


    Marne: chef-lieu, Châlons

    Online Contents | 1994


    Les taxis de la Marne

    Dutourd, Jean | GWLB - Gottfried Wilhelm Leibniz Bibliothek | 1956


    The battle of the marne

    Engineering Index Backfile | 1915