• citations in SCIndeks: [2]
  • citations in CrossRef:[2]
  • citations in Google Scholar:[]
  • visits in previous 30 days:18
  • full-text downloads in 30 days:17


article: 6 from 73  
Back back to result list
2016, vol. 63, iss. 2, pp. 501-513
Application of scenario analysis in the investment projects evaluation
University of Business Academy in Novi Sad, Faculty of Applied Management, Economics and Finance, Belgrade,,
Investing represents an investment in the present to achieve certain effects in the future, and risk is an essential part of the investment process. Scenario analysis involves key risk factors of the project, its sensitivity to changes in key factors and the likelihood of their changes. Scenario analysis allows us to assign probabilities to the base case, the best case and the worst case so that we can find the expected value and standard deviation of the project's NPV to get a better idea of the project's risk. The goal is to determine whether it is possible to make relevant investment decisions on the basis of the parameters of projects risk, such as the standard deviation and the coefficient of variation. The paper is based on a mathematical model, applied to a specific agricultural company. In our case, the project has a wide range of possibilities and a large potential negative value, which suggests a great risk of the project. Although the scenario analysis shows a higher risk, it is not clear if the project should be accepted or not, and therefore, it is necessary to conduct simulation analysis, in order to get reliable answers.
Atrill, P., Mclaney, E. (2009) Management Accounting for Decision Makers. London: FT Prentice-Hall, Pearson Education
Bodi, Z., Kejn, A., Markus, A.J. (2009) Osnovi investicija. Beograd: Data status, šesto izdanje
Brealey, R.A., Myers, S.C., Allen, F. (2014) Corporate finance. Boston: McGraw-Hill
Brigham, E., Ehrhardt, M. (2014) Financial management: Theory and practice. Canada: South-Western Cengage Learning, 14 Ed
Dedi, L., Orsag, S. (2007) Capital Budgeting Practices: A Survey of Croatian Firms. South East European Journal of Economics & Business, 2 (1):
Drake, P.P., Fabozzi, F.J. (2010) The basics of finance : an introduction to financial markets, business finance, and portfolio management. John Wiley & Sons
Ehrhardt, M., Brigham, E. (2011) Corporate finance: A focused approach. Western Educational Publishing
Fabozzi, F.J., Drake, P.P. (2009) Finance : capital markets, financial management, and investment management. John Wiley & Sons
Gervais, S. (2009) Behavioral finance: Capital budgeting and other investment decisions. in: Behavioral Finance, USA
Gitman, L., Zutter, C. (2012) Principles of managerial finance. USA: Prentice Hall
Gitman, L.J. (2009) Principles of managerial finance. Boston: Pearson Education
Ignjatijević, S. (2015) Ekonomska analiza značaja stranih direktnih investicija. Oditor, no. 11, pp. 4-15
Lasher, W. (2008) Practical financial management. USA: Thomson South-Western
Moyer, C., Mcguigan, J., Rao, R., Kretlow, W. (2012) Contemporary financial management. USA: South-Western Cengage Learning
Orsag, S. (2002) Budžetiranje kapitala - procjena investicijskih projekata. Zagreb: Masmedia
Parrino, R., Kidwell, D.S., Bates, T.W. (2012) Fundamentals of corporate finance. John Wiley & Sons, second edition
Pike, R., Neale, B. (2006) Corporate finance and investment: Decisions and strategies. Englewood Cliffs, NJ, itd: Prentice Hall
Shim, J.K., Siegel, J.G. (2009) Budgeting basics and beyond. Hoboken, NJ: John Wiley & Sons
Tapiero, C. (2004) Risk and financial management. Chichester: John Wiley & Sons
van Horne, J.C., Wachowicz, J.M.J.R. (2007) Osnovi finansijskog menadžmenta. Beograd: Data status
Watson, D., Head, A. (2007) Corporate finance: Principles & practice. England: Person Education Limited


article language: English
document type: Review Paper
DOI: 10.5937/ekoPolj1602501B
published in SCIndeks: 08/07/2016
Creative Commons License 4.0

Related records

Posl ekon (2012)
Characteristics of investment projects and problems in their evaluation
Brzaković Tomislav D., et al.

Vojno delo (2015)
Implementation of risk in the evaluation of investment projects
Brzaković Tomislav D., et al.

Ekonomika preduzeća (2010)
Going public process: Challenges for the Serbian corporate practice
Malinić Dejan, et al.

show all [55]