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

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.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Mechanical Engineering.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2005

Author dc:creator

• Gibbons, Meghan (Meghan Leigh)

Advisor dc:contributor.advisor

• Stewart C. Myers.

• Mechanical Engineering.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/32896

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/32896