Author : M.B. Murkute 1
Date of Publication :7th March 2015
Abstract: Residential apartment scheme is being adopted in India by project promoters. It is essential to perform feasibility study of any project before commencement of it. During the construction period many factors may affect of project cash flow, those factors can be identified by risk assessment and known as ‘Critical factors’. Considering these critical factors and their combinations will show a possible situations, which may occur during the construction. After analyzing the Internal Rate of Return (IRR) of each possible situation, we can compare this value of IRR with cost of capital of company; and able to determine the practical feasibility of residential project for each situation. For the feasibility of project, each possible situation must have greater value of IRR as compare to Cost of capital of company. Only feasible projects are beneficial for a company. The literature shows how sensitivity analysis can contribute to improve decision-making, but little can be found about the advantages of exploring model sensitivity visually to aid the decision maker. Ultimately, the goal of this work is to develop effective interactive visualization techniques to assist people who are using models for decision making but who need to explore the often complex relationships between the values of model variables and the model output. Hence, feasibility study is essential before commencement of it. After preparing a sensitivity model of residential project, this model can be implementing to other residential projects.
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- Yoojung Yoon, Zaid Tamer and Makarand Hastak, “Protocol to Enhance Profitability by Managing Risk in Construction Projects”, Journal of Management in Engineering, 2014.
- Pablo Fernandez, “WACC: Definitions, Misconceptions and Errors”, IESE Business school-University of Navarra, WP 914, March 2011.
- Anna Regina Bjornsdottir, “Financial Feasibility Assessments”, School of Engineering and Natural Sciences, University of Iceland, Reykjavik, January 2010
- Jean Imbs, “Trade, Finance, Specialization and Synchronization: Sensitivity Analysis”, London Business School and CEPR, September 2003.
- R. Gregory Michel, “Net Present Value Analysis”, Government Finance Review, February 2001, Page No 27-31.
- Lucia Breierova and Mark Choudhari, “An Introduction to Sensitivity Analysis”, MIT system dynamics in Education Project, September 1996, Page No.41-106.
- H. Christopher Frey and Sumeet R. Patil, “Identification and review of sensitivity analysis methods”, North Carolina state university Raleigh.
- Christopher R.Lattanzi and P.Eng. “Discounted cash flow analysis input parameters and sensitivity”, President, Micon International Limited.