|
|
Group of Safety and Logistics of Maritime Transportation > 5.5 Industrial and Occupational Safety > Publications
Água, P.B. and Mendes, J.P. (2021), Project Finance Flight Simulator, PROELIUM - Revista Científica da Academia Militar, Vol. 8(3), pp. 46-49.
Project Finance addresses the need to secure large-scale, capital-intensive investments in face of expenditure constraints. Efficiency and more logical distribution of risk among stakeholders are major advantages. The high amounts involved and the usually high proportion of debtmillions, in any currencycall for detailed risk analysis and risk allocation. In Project Finance there is limited or no recourse over the sponsor's assets and so investors rely on future cash flows for profitability. Growth prospects are therefore preferred to absolute values at any given time. However, most investors still decide based on the Net Present Value (NPV) of an opportunity and use risk-adjusted discount rates to cope with uncertainty. This additional mark-up can ultimately turn down an otherwise profitable venture. By making the continuous-time behavior of cash flows visible, simulation models based on System Dynamics avoids these drawbacks and provides a method to assess and manage financial risks that takes growth into account.
Keywords: Project Finance, Finance engineering, Cash flow management, Investment risk, simulation models
Request a copy of this article
For information about all CENTEC publications you can download: Download the Complete List of CENTEC Publications
|