Project life cycle risk analysis and capital investment decisions

• Main Authors: Manalo, Romeo Galang, Manalo, Marivic Valenzuela
• Format: text
• Published: Animo Repository 2024
• Subjects: Accounting; Risk Analysis
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/12361
• Institution: De La Salle University

This study is the result of the company's intention to optimize their various capital investment decision processes within the organization. Since huge amount of corporate funds are allocated to capital expenditure, the management of the firm decided to look for incorporating non-financial aspects such as performance measurements with the corresponding risk analysis to determine how performance and risk factors may be altered to create the most utility for the least cost, in terms of the firm's service cost, support cost and social cost. With this need of including qualitative factors and risk analysis in the selection of firm's capital investment projects, the Project Life Cycle Risk Analysis Framework was developed.What makes capital investment decision so demanding is the element of risk that goes with every project that the firm has to make. Through the Electric Capital Project (ECP) Life Cycle Risk Analysis, the various risks that need to be addressed from the planning stage up to retirement stage of any capital projects of the firm are properly addressed since all capital projects must undergo the life cycle risk analysis prior to subjecting them to capital investment decision.