Risk analysis in investment appraisal based on the Monte Carlo simulation technique

This work has been prepared for the purpose of presenting the methodology and uses of the Monte Carlo simulation technique as applied in the evaluation of investment projects to analyze and assess risk. In the deterministic appraisal the basic decision rule for a project is simply to accept or reject the project depending on whether its net present value (NPV) is positive or negative, respectively. Similarly, when choosing among alternative (mutually exclusive) projects, the decision rule is to select the one with the highest NPV, provided that it is positive. Recognizing the fact that the key project variables (as: volume of sales, sales price, costs) are not certain, an appraisal report is usually supplemented to include sensitivity and scenario analysis tests. Both tests are static and rather arbitrary in their nature. During the simulation process, random scenarios are built up using input values for the project's key uncertain variables, which are selected from appropriate probability distributions. The results are collected and analyzed statistically so as to arrive at a probability distribution of the potential outcomes of the project and to estimate various measures of project risk

[The effectiveness of rare earth elements as a possible alternative growth promoter for pigs and poultry].

Mixtures of Rare Earth Elements (REE) have been used as animal growth-promoters on a large scale in China during the last 20 years. Numerous studies carried out in China claim it produces quite sensational growth-promoting effects in all categories of farm animals. To explore the question of whether REE's might prove suitable as a growth-promoter under western keeping conditions, feeding experiments were performed on pigs and poultry. The animals received a typical diet, supplemented with REE salts in concentrations between 75 and 300 mg/kg feed. Weight-gain, feed-intake, feed-conversion and (where applicable) laying parameters were observed. It was shown that in pigs receiving feed supplemented with REEs, an increase in daily weight gain of up to 19% and an improvement in feed-conversion of up to 11% can be achieved, whereas, for poultry, no positive effects on growth or productivity of the animals could be observed. Testing of important organs via Neutron Activating Analysis (NAA) showed a minute accumulation of REE, principally in liver and bones. Analysis of the poultry gut-flora, using selective media, showed that the main microorganism populations of the alimentary canal were unaffected by feed-supplementation with REE