Uncertainty Study of Financial Evaluation of Project Investment

Abstract

In terms of financial evaluation of project investment, prediction and estimation of the future cash flow on the basis of the particular judgment as well as the limitations of prediction methods and conditions bring about the uncertainty of various factors affecting the future cash flow in the project investment. How to raise the efficiency of the project investment decision-making has become investorspsila greater concern. Using breakeven analysis, sensitive analysis and excel technology, etc. This paper puts forward the main index and parameter of breakeven analysis and sensitive analysis. The author believes that the critical point of project investment transferring the profit into loss is an extreme-value question which should be considered by investors, and uncertainty factors of sensitive analysis consists of unit price, unit variable cost, fixed cost and sales volume. The paper also constructs the flow of the sensitive analysis and breakeven analysis of data processing and concludes an analysis model of project investment uncertainty, in order to provide a reference of data processing for the investors when they have the financial evaluation for the project investment.