A resource investment problem is a project-scheduling problem in which the availability levels of the resources are considered decision variables and the goal is to find a schedule and resource requirement levels such that some objective function optimizes. In this paper, we consider a resource investment problem in which the goal is to maximize the net present value of the project cash flows. ...

The paper presents an alternative and original method for establishing the present worth and feasibility of a capital investment where the underlying parameters of interest/discount rate, cash flows and investment lifespan are uncertain. The method, based on Markov chains, complements existing and useful practices such as sensitivity analysis, Monte Carlo simulation, Hillier style probabilistic...

In capital budgeting problems future cash–flows are discounted using the expected one period returns of the investment. In this paper we establish a theory that relates this approach to the assumption that markets are free of arbitrage. Our goal is to uncover implicit assumptions on the set of cash–flow distributions that are suitable for the capital budgeting method. As results we obtain that ...

he oil industry was among the first of the large industries both to adopt discounted cash flow methods in valuing assets and projects. Discounted cash flow (DCF) tools are fundamental to engineering and financial analysis in the oil industry. They are well understood by managers and generally provide accurate valuations of developed hydrocarbon reserves. Unfortunately, DCF techniques systematic...