ASSESSING THE ECONOMIC EFFICIENCY OF PROJECTS USING THE SIMULATION MODELING METHOD

Abstract

The article explores the conceptual foundations and methodological principles of the economic evaluation of investment projects. It provides an in-depth analysis of the main approaches to determining economic performance based on the assessment of its key components, including gross revenue, operating costs, depreciation charges, loan servicing expenses, and investment outlays. Particular attention is devoted to examining the relationship between financial and economic prices, which enables a more accurate identification of the real value of resources and project outcomes under conditions of market imperfections and externalities.

The study substantiates the relevance and practical importance of applying simulation models in the evaluation process, especially when dealing with uncertainty, variability of input parameters, and risks that cannot be fully captured through traditional deterministic methods. Simulation modelling is presented as an effective analytical tool that enhances the robustness of project assessments, improves the reliability of projected indicators, and supports more informed managerial decisions.

The article also formulates a clear and logically structured sequence for conducting the economic evaluation of investment projects using simulation techniques. This sequence includes identifying significant factors, constructing the input data distribution, generating multiple scenarios, and analyzing the distribution of expected results. The proposed methodological approach is illustrated with a specific practical example, which demonstrates the advantages of simulation modelling and confirms its ability to provide deeper insights into project efficiency and risk profiles.