Project Value at Risk

Project Value at Risk

Project value at risk means that how much the result worthy deviates from the expected value. This is an important calculation or value for investment decision making.

Project Value calculation

Project value at risk may be calculated by two methods, which has been explained below

1        .    Standard deviation

Project value at risk may be calculated as standard deviation of NPV from the expected value. In first place is calculated, and then volatility in NPV is determined with help of standard deviation.

2        .    Volatility Present Value of Cash flows

Project value at risk may be calculated as volatility in present value of cash flows. in this method NPV has no relevance and ignored in calculation.