This teaching note provides step-by-step instruction for simulating the net present value and the internal rate of return of a five-year project. The uncertainty lie in the initial level of sales, sales growth rates, gross profit margins, operating expenses before depreciation, and the terminal...

Purpose – Logistic service providers (LSPs) are increasingly required to take over the ownership of network-specific inventories and to finance related working capital. The paper examines the nature of associated uncertainties, especially behavioural risks and illustrates the mechanisms of the...

We study how investments that require long-term financial commitments are affected by undiversifiable, uninsurable risk in the economic environment in the context of investor preferences characterized by decreasing absolute risk aversion and a desire for consumption smoothing. In our setting, if...

The object of research is the risk of tearing of integration ties between the participants arising in the projects of creation of transport and logistics centers. The specific features of the concept of "integration project risks" are defined, which include the risks that may affect the...

Several firms make business decisions based on risk specifications or estimates provided by domain-experts. But research on whether the format of risk specifications systematically affects decision making in multi-dimensional environments is scarce. Using laboratory experiments, we show that...

This article explores how the EPC contractor's risk of project delays related to the default of a key component supplier can be mitigated contractually. Only a limited number of the remedies that are regulated in standard construction contract forms are designed to support the EPC contractor's...

Background: Cross-discipline team collaboration between the project ownership team, design team and project delivery team is central to effective management of risk, uncertainty and ambiguity. A recently-developed framework that was developed to provide a visualisation tool to enable various...