CIVILEN 3080 Lecture Notes - Lecture 8: Probabilistic Analysis Of Algorithms, Climate Change Mitigation, Mansfield

• School: Ohio State University
• Department: Civil Engineering
• Course: CIVILEN 3080
• Professor: Bielicki Jeff

Document Summary

Present research on risk in an approach to climate change mitigation. Estimating the amount of risk involved in an investment project. Calculate the man and variance of npw. Step 1: express after-tax cash flow as a function of unknown unit demand (x) and unit price (x) Known with confidence: required investment, project life, income tax rate, marr. Unknown but predictable (most likely values): unit variable cost, number of units, unit price, salvage value, fixed cost. Cash inflow: pw(15%) = 0. 6xy(p/a, 15%, 5) + 44,490 = 2. 0113xy + 44,490. Cash outflow: pw(15%) = 125,000 + (9x+6000)(p/a, 15%, 5) = 30. 1694x + 145,113. Net cash flow: 20113x(y 15) 100,623. Step 3: calculate the npw for each event. Determine the mean and variance of cash flows in each period then aggregate the risk over the project life in terms of npw. Expectation is the same, but the variance has an extra term. Ea > eb and va vb, select a.