INVESTMENT DECISIONS BASED ON UNCERTAINTY ANALYSIS AND MULTISEQUENTIAL APPROACH OF EFFICIENCY

The paper approaches the problem of making sequential decisions in allocation critical resourses for undertaking an investment projects (developed on a long period of time – several years). The investment decisions are based on the performance indicators measuring the impacts, outcomes, outputs and inputs of the project. These indicators give during the life cycle of the project indications on allocation various resources in the implementation stage and register the progress toward project objectives. The relevance of the proposed subject relates to the problem of making estimations on the benefits and costs at each years of the forecasted horizon and it involves the dynamic programming method (inspired by the works of R. Bellman) to minimize the standard deviation of the net present value for the investment project. The indicators used in investment appraisal theory such as the NPV and IRR are approached as uncertain variables and the dynamic programming method is applied as a way minimize the expected variability in project outcomes. The newly suggested way to interpret the uncertainty that is associated inherently to the DCF indicators is meant to enhance the ability to make long-term investment decision on marginal projects.