Maximizing the Net Present Value of a Project under Inflationary Conditions
Project scheduling to maximize the net present value of the cash flows has been a topic of recent research. These researches assume that activities cost or price for materials and service in the marketplace remain relatively unchanged over the lifecycle of the project. Unfortunately, due to the increasing prices of goods in most countries during the project, it is not generally a realistic assumption. In this paper, we consider project scheduling problem with discounted cash flows under inflationary conditions. We propose two different situations due to the type of contract between contractor and client as fixed-price contract and cost-reimbursement contract. To interpret the situation, we use a lemma which shows the importance of entering inflation for both sides of a project clients and contractor. Finally, an example is solved and the proposed procedure is applied to interpret the solution.
Maximizing the Net Present Value of a Project under Inflationary Conditions.
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Maximizing the Net Present Value of a Project under Inflationary Conditions.
Autori:
Amir
Abbas Najafi
[1]
[1]
Department of Industrial Engineering, Qazvin Islamic Azad University, Qazvin, Iran
Rezumat
Project scheduling to maximize the net present value of the cash flows has been a topic of recent research. These researches assume that activities cost or price for materials and service in the marketplace remain relatively unchanged over the lifecycle of the project. Unfortunately, due to the increasing prices of goods in most countries during the project, it is not generally a realistic assumption. In this paper, we consider project scheduling problem with discounted cash flows under inflationary conditions. We propose two different situations due to the type of contract between contractor and client as fixed-price contract and cost-reimbursement contract. To interpret the situation, we use a lemma which shows the importance of entering inflation for both sides of a project clients and contractor. Finally, an example is solved and the proposed procedure is applied to interpret the solution.
Cuvinte cheie:
Net Present Value, Scheduling, Project, Inflation, Discounted Cash Flows
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