Simulation approach in risk-weighted cash flow rate of return determination

Conference · Wed Jan 01 04:00:00 EST 1986

OSTI ID:7008400

Yu, J P

Discounted cash flow rate of return polynomial equations sometimes result in several values of the roots. Only one of these values can be used to accurately characterize the venture, and concern about this prompts a new approach to the problem. Simulation approach evaluates the risk-weighted rate of return which determines the proper range of values. The range of values is then used to estimate the cash flow with probabilistic sensitivity analysis. This analytical technique will determine a valid rate for high risk oil ventures. Simulation method is very easily applied with a microcomputer, and the computer speed has made this approach possible. In addition, spreadsheet and graphic application programs can be used to display the cash flow rate of return and help the decision-making procedure.

• OSTI ID: 7008400
• Report Number(s): CONF-861080-
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700 -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002* -- Energy Planning & Policy-- Petroleum
ANALYTICAL SOLUTION
CAPITAL
COMPUTER CODES
COMPUTER GRAPHICS
COMPUTERIZED SIMULATION
COMPUTERS
COST BENEFIT ANALYSIS
COST ESTIMATION
DECISION MAKING
ELECTRONIC CIRCUITS
EXPENDITURES
EXPLORATION
FUNCTIONS
INDUSTRY
MICROELECTRONIC CIRCUITS
MICROPROCESSORS
PAYBACK PERIOD
PETROLEUM INDUSTRY
POLYNOMIALS
PROBABILITY
RISK ASSESSMENT
SENSITIVITY
SIMULATION