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Fuzzy Numbers In Valuation Of Real Investment Profitability

Author

Listed:
  • Arkadiusz Górski

    (Wroclaw University of Technology)

  • Katarzyna GwóŸdŸ

    (Wroclaw University of Technology)

Abstract

In response to the weakness of traditional efficiency assessment methods taking risk into account, the modification of the Certainty Equivalent method is proposed in this paper. The possibility of connecting solutions from different fields provides for the elaboration of a more effective tool to illustrate and indicate the accurate level of risk in the investment efficiency calculus, which is the matter under consideration in the paper. The authors propose to use the modified method of a Certainty Equivalent that is based on fuzzy numbers. The aim of the method is to make decisions that are less incorrect. The work should be treated as an introduction to proposed further research on the subject.

Suggested Citation

  • Arkadiusz Górski & Katarzyna GwóŸdŸ, 2014. "Fuzzy Numbers In Valuation Of Real Investment Profitability," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 10(1), pages 17-26, June.
    • Handle: RePEc:rze:efinan:v:10:y:2014:i:1:p:17-26
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    References listed on IDEAS

    as
    1. Alexander A. Robichek & Stewart C. Myers, 1966. "Conceptual Problems In The Use Of Risk‐Adjusted Discount Rates," Journal of Finance, American Finance Association, vol. 21(4), pages 727-730, December.
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    More about this item

    Keywords

    real investment profitability; fuzzy numbers; Certainty Equivalent Least Squares Method;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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