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BRILLIANT’S Analysis of Risk and Uncertainty in Investment Decisions 485
Cnamo³V AZw‘m{ZV H¡$e BZâbmo g§Ho$V H$aVm h¡ {H$ 30% g§^mdZm h¡ {H$ H¡$e BZâbmo `10,000 hmoJm, 40%
g§^mdZm h¡ {H$ ¶h `12,000 hmo gH$Vm h¡ Am{X& BZ AZw‘m{ZV H¡$e BZâbmo Ho$ AmYma na h‘ H¡$e âbmo Ho$ Ano{jV ‘mZ
H$s JUZm H$a gH$Vo h¢:
C.I. Probability CI × Probability
10,000 0.3 3,000
12,000 0.4 4,800
15,000 0.2 3,000
17,000 0.1 1,700
EVCF 12,500
Such similar series of estimated cash inflows may be available for different other years also.
The same procedure is adopted for the probability distribution for all the years and then the
expected value of cash inflows are discounted at an appropriate discount rate to find out the NPV
of the proposal.
AZw‘m{ZV H¡$e BZâbmo H$s Bg àH$ma H$s grarO Aݶ dfm] Ho$ {bE ^r CnbãY hmo gH$Vr h¡& ¶h à{H«$¶m g^r dfm]
Ho$ {bE àmo~o{~{bQ>r {S>pñQ´>ã¶yeZ Ho$ {bE AnZm¶r OmVr h¡ VWm BgHo$ níMmV² H¡$e BZâbmo H$m Ano{jV ‘yë¶ àñVmd Ho$
NPV H$mo kmV H$aZo Ho$ {bE Cn¶w³V {S>ñH$mC§Q> aoQ> na {S>ñH$mC§Q> H$s OmVr h¡&
Illustration 5.2.10
A company is considering an investment in a project that requires an initial investment of
` 3,000 with cash flow after tax (CFAT) generated over three years as follows:
EH$ H§$nZr EH$ àmoOo³Q> ‘| {Zdoe na {dMma H$a ahr h¡ {Og‘| `3000>Ho$ àma§{^H$ {Zdoe H$s Amdí¶H$Vm h¡ {OgH$m
VrZ dfm] Ho$ níMmV² CËnÝZ H¡$e âbmo AmâQ>a Q>¡³g (CFAT) {ZåZ{b{IV h¡… (in `)
Year (df©) 1 Year (df©) 2 Year (df©) 3
CFAT Probability CFAT Probability CFAT Probability
(àmo~o{~{bQ>rO) (àmo~o{~{bQ>rO) (àmo~o{~{bQ>rO)
800 0.10 800 0.10 800 0.20
1,000 0.20 1,000 0.30 1,000 0.50
1,500 0.40 1,500 0.40 1,500 0.20’
2,000 0.30 2,000 0.20 2,000 0.10
(a) Determine the expected NPV of project when discount rate is 5%.
àmoOo>³Q> H$m Ano{jV NPV {ZYm©[aV H$s{OE O~ {S>ñH$m§CQ> aoQ> 5% h¡&
(b) Determine the standard deviation for each year.
à˶oH$ df© Ho$ {bE ñQ>¢S>S>© S>o{dEeZ {ZYm©[aV H$s{OE&
