Management of economic and financial risk of investments in assets for extraction of non-metallic mineral extracts

Abstract

The investment projects evaluation in real assets is essential for decision making; however, undoubtedly, it is a process whose components have interdependent relationships, generating uncertainties that can lead to the wrong acceptance or rejection of the investment. This study aimed to apply the Monte Carlo simulation to incorporate risk into the economic and financial evaluation of a mineral assets investment project under conditions of uncertainty, with a view to measuring the obtained returns. The evaluation was based on discounted cash flow projection, allowing the adoption of methods that consider the time value of money. Risk incorporation was performed using a stochastic and dynamic mathematical model, with the Monte Carlo method used to generate values from probability distributions. The results showed that the investment project in mineral assets is economically feasible by adding value to investors.