Application of Risk Analysis in Business Investment Decision-Making

Investment decision-makings should be regarded in each business entity as the crucial factor for its long-term prosperity. An acquired decision affects the performance of the company as well as its competitiveness in long time. If a competent investor has an interest to make a qualified investment d...

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Autores principales:	Martina Merková, Josef Drábek, Denis Jelačić
Formato:	article
Lenguaje:	EN
Publicado:	University of Zagreb, Faculty of Forestry and Wood Technology 2014
Materias:	investment enterprise investment investment activity risk of investment sensibility analysis Forestry SD1-669.5
Acceso en línea:	https://doaj.org/article/8a41aae05bf348139b3b005e26b738c4
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id	oai:doaj.org-article:8a41aae05bf348139b3b005e26b738c4
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spelling	oai:doaj.org-article:8a41aae05bf348139b3b005e26b738c42021-12-02T06:20:41ZApplication of Risk Analysis in Business Investment Decision-Making10.5552/drind.2013.13170012-67721847-1153https://doaj.org/article/8a41aae05bf348139b3b005e26b738c42014-01-01T00:00:00Zhttp://hrcak.srce.hr/file/166361https://doaj.org/toc/0012-6772https://doaj.org/toc/1847-1153Investment decision-makings should be regarded in each business entity as the crucial factor for its long-term prosperity. An acquired decision affects the performance of the company as well as its competitiveness in long time. If a competent investor has an interest to make a qualified investment decision, it means that he must primarily determine the time and risk factor. In the capital-intensive investment projects, attention must be paid to the risks that the preparation, realization and use of investment bring. The aim of this paper is to identify critical factors that affect the expected profit and cash flow in the implementation of investment projects by applying the most advanced models used to quantify the risks of investing. Research was conducted in a wood processing and furniture manufacturing company. The results given by cash flow indicatiors show that the investment project is feasible and effective. By changing some parameters, sensitivity analysis shows that the main risk factors for the project in question are the selling price, volume of production, material costs and labor costs.Martina MerkováJosef DrábekDenis JelačićUniversity of Zagreb, Faculty of Forestry and Wood Technologyarticleinvestmententerprise investmentinvestment activityrisk of investmentsensibility analysisForestrySD1-669.5ENDrvna Industrija, Vol 64, Iss 4, Pp 313-322 (2014)
institution	DOAJ
collection	DOAJ
language	EN
topic	investment enterprise investment investment activity risk of investment sensibility analysis Forestry SD1-669.5
spellingShingle	investment enterprise investment investment activity risk of investment sensibility analysis Forestry SD1-669.5 Martina Merková Josef Drábek Denis Jelačić Application of Risk Analysis in Business Investment Decision-Making
description	Investment decision-makings should be regarded in each business entity as the crucial factor for its long-term prosperity. An acquired decision affects the performance of the company as well as its competitiveness in long time. If a competent investor has an interest to make a qualified investment decision, it means that he must primarily determine the time and risk factor. In the capital-intensive investment projects, attention must be paid to the risks that the preparation, realization and use of investment bring. The aim of this paper is to identify critical factors that affect the expected profit and cash flow in the implementation of investment projects by applying the most advanced models used to quantify the risks of investing. Research was conducted in a wood processing and furniture manufacturing company. The results given by cash flow indicatiors show that the investment project is feasible and effective. By changing some parameters, sensitivity analysis shows that the main risk factors for the project in question are the selling price, volume of production, material costs and labor costs.
format	article
author	Martina Merková Josef Drábek Denis Jelačić
author_facet	Martina Merková Josef Drábek Denis Jelačić
author_sort	Martina Merková
title	Application of Risk Analysis in Business Investment Decision-Making
title_short	Application of Risk Analysis in Business Investment Decision-Making
title_full	Application of Risk Analysis in Business Investment Decision-Making
title_fullStr	Application of Risk Analysis in Business Investment Decision-Making
title_full_unstemmed	Application of Risk Analysis in Business Investment Decision-Making
title_sort	application of risk analysis in business investment decision-making
publisher	University of Zagreb, Faculty of Forestry and Wood Technology
publishDate	2014
url	https://doaj.org/article/8a41aae05bf348139b3b005e26b738c4
work_keys_str_mv	AT martinamerkova applicationofriskanalysisinbusinessinvestmentdecisionmaking AT josefdrabek applicationofriskanalysisinbusinessinvestmentdecisionmaking AT denisjelacic applicationofriskanalysisinbusinessinvestmentdecisionmaking
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Application of Risk Analysis in Business Investment Decision-Making

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