Besta, Petr

Mynář, Martin

Sikorová, Andrea

Švajdová, Lenka

English

DSpace at VSB Technical University of Ostrava

l I I I '\I L I j) �-....-.-------------1 Sborník vědeckých prací Vysoké školy báňské - Technické univerzity Ostrava číslo 4, rok 2009, ročník LII, řada hutnická článek č. 1588 DEFINING THE EXTENT OF INVESTMENT PROJECT RISK A. SIKOROVÁ', P. BESTA 1, L. ŠVAJDOVÁ 1 , M. MYNÁŘ1 1 VŠB - Technical University of OstravaABSTRACT: The paper presents a method for risk evaluation of an investment project, which is suitable especially with respect to the purpose and subject of the project risk. KEY WORDS: Project, risk factors, volatility, net current value, certainty coefficient. 1 INTRODUCTION Risk is a phenomenon people meet in almost every situation during their lives. A man lives in the nature and in the society, he performs his duties, both in the economic and persona! life{'he is subject to the influence of environment which he li ves in, he has his ideas, his own way of thinking, he enters various commitments and cooperation relationships, he takes care of his offspring, acquires education, creates new and unique values. In his judgement, he follows specific rules required by the society, but he also asserts his own ideas. He evaluates his own behaviour and he is responsible for acts of other people, and he leads them towards his own benefit as well as to the benefit of the society. The human activities are not straight forward but, on the contrary, they are very diverse and very often even contradictory. The _events which we call risks lie in the contrariness. [5] The identification of the risk factors, formulation of their importance and the assessment of the project risk extent represent, above all, the scope of the investmeht project risk analysis. -2, RISK IN INVESTMENT DECISION MAKING The success of projects depends, to a certain level, on the quality of their preparation. The preparation should take into account both the risk and the lincertainty. The risks are undesirable, unexpected or unplanned events which jeopardise accomplishment of the project objectives, which have a negative irnpact on the project, and they occur with a certain probability. The success of investment projects, either the increase of production capa.cities, Iaunch of new products, technologies, etc., can significantly contribute to the growth of the company. On the other hand, their failure can cause performance decrease or it can put further existence of the company in danger. The economic results of the investment projects depend on many factors (the so called risk factors). These factors influence the revenues and costs of these projects. The uncertainty of their developmerll: and hence the unreliability of their prognosis remain a fundamental problem of these factors. The real Iife experience deals with this difficulty by ignoring the risk and uncertainty. The decision· making, regarding the risks and uncertainties, is transferred into decision making for „certainty of risk factors development", as a result of this approach. 102 

Defining the extent of investment project risk

http://dspace.vsb.cz/bitstream/10084/78181/2/VSB%20HUF%202009-4_16_Sikorova.pdf

Defining the extent of investment project risk

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