Established Deterministic Investment Appraisal versus Uncertainty in Investment
When it comes to investing in an infrastructure project, the conventional approach is to evaluate risk through a deterministic approach. Infrastructure Investment: An Engineering Perspective, however, takes on uncertainty in investment. Of interest to engineering consultants, government departments, financial institutions, or anyone involved in investment in infrastructure, this text provides the necessary tools for the analysis and appraisal of investment in infrastructure and other assets with uncertain futures.
It factors in the finance and engineering of assets such as roads, buildings, bridges, dams, pipelines, railways, ports, seawalls, wastewater treatment facilities, and addresses future demand, operating costs, maintenance costs, and other lifetime and investment parameters in both financial and non-financial terms. It considers the impact of climate change and the possible use of adaptive and flexible solutions capable of responding to changed futures, as well as how such uncertainty affects the future performance of these investments. The book also incorporates illustrated case studies and Markov chains to model an investment.
A pivotal work containing 11 chapters, this text provides:
- An original contribution to feasibility analysis under uncertainty
- A systematic and ordered treatment of capital investment in infrastructure
- A structured flow, from a systematic treatment of conventional deterministic approaches through to a complete treatment incorporating uncertainty
Infrastructure Investment: An Engineering Perspectivedetails investment analysis in the presence of uncertainty, and is beneficial to students, academics, and practitioners dealing with decision
Table of Contents
Introduction. Part I. Deterministic: Benefits, costs and time value. Appraisal. Appraisal: Extensions and comments. Part II. Probabilistic: Background. Probabilistic cash flows. Real options. Real option types and examples. Financial options. Probabilistic cash flows and interest rates. Markov chains and investment analysis. Bibliography and references.
David G. Carmichael is professor of civil engineering and former head of the Department of Engineering Construction and Management at the University of New South Wales, Australia. He is a graduate of the Universities of Sydney and Canterbury; a fellow of the Institution of Engineers, Australia; a member of the American Society of Civil Engineers; and a former graded arbitrator and mediator. Professor Carmichael publishes, teaches, and consults widely in most aspects of project management, construction management, systems engineering, and problem solving. He is the author of Problem Solving for Engineers, also published by CRC Press.