Valuing project financing using Monte Carlo simulation, with application to the expansion of a chemical company

Author(s)
Gibbons, Meghan (Meghan Leigh)
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Massachusetts Institute of Technology. Dept. of Mechanical Engineering.
Advisor
Stewart C. Myers.
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Abstract
The purpose of this thesis is to analyze the specific project value of a chemical company that undertook a major expansion in the late 1990s. The actual details of the investment were unique and conditional on the level of cumulative internal rate of return for the project. This thesis evaluates the project value and the terms of the project financing using Monte Carlo simulation, which is able to take into account the path-dependent nature of the cash flow model. The results of this research are of interest to investors facing similar financing terms or similar investment opportunities in the future.
Description
Thesis (S.B.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering, 2005.
 
Includes bibliographical references (p. 54).
 
Date issued
2005
URI
http://hdl.handle.net/1721.1/32896
Department
Massachusetts Institute of Technology. Department of Mechanical Engineering
Publisher
Massachusetts Institute of Technology
Keywords
Mechanical Engineering.
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