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Fuzzy Capital Budgeting for Projects Characterized by Step Type Fuzzy Intervals
Jan Schneider and Dorota Kuchta

This paper proposes a method for calculating the net present value (NPV) for projects with fuzzy cash flows and fuzzy discount rates, where the membership functions of both features are of step type. Explicit formulae are given for the corresponding fuzzy NPV. It is then shown how project candidates can be compared using the NPV criterion. A generalized possibility mean value is used as a tool for comparison. The proposed methodology is illustrated with a numerical example.

Keywords: Capital budgeting, NPV, fuzzy intervals, step functions, generalized inverse function, ranking methods

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