The decision analysis for project investment combining exposure preference and benefit pursuing
Zhao Jin-lou, YU Lean
Abstract
Zhao Jin-lou, YU Lean
Abstract
In project investment management, there is a difference for people between exposure preference and benefit pursuing. A great many investors hope to gain the highest benefit under the condition of steady exposure or to make the lowest exposure under the circumstance of steady benefit. However, the existing decision analysis processes of project investment, such as net present value process and internal rate of return process, only analyze project feasibility from one side or one angle of one side. These faults don't combine exposure preference with benefit pursuing to analyze a project. On the basis of these faults, the thesis creates an optimal model of project investment with two sides using differential process from the view of economy control theory. Moreover, the optimal model successfully solves the paradox relationship of exposure and benefit in the project investment decision. At the same time, the thesis verifies sensibility and feasibility of the process by calculating and analyzing of true examples.
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In project investment management, there is a difference for people between exposure preference and benefit pursuing. A great many investors hope to gain the highest benefit under the condition of steady exposure or to make the lowest exposure under the circumstance of steady benefit. However, the existing decision analysis processes of project investment, such as net present value process and internal rate of return process, only analyze project feasibility from one side or one angle of one side. These faults don't combine exposure preference with benefit pursuing to analyze a project. On the basis of these faults, the thesis creates an optimal model of project investment with two sides using differential process from the view of economy control theory. Moreover, the optimal model successfully solves the paradox relationship of exposure and benefit in the project investment decision. At the same time, the thesis verifies sensibility and feasibility of the process by calculating and analyzing of true examples.
Key concepts: Preference, Investment (military), Net present value, Return on investment, Process (computing), Sensibility, Internal rate of return, Operations research