RESEARCH ARTICLE


Real Estate Project Financial Evaluation Based on Cash Flow Estimation



Li Wei*, 1, Teng Yun2
1 Dalian Maritime University, Liaoning Dalian 116025, China
2 Dalian Commodity Exchange, Trading Department,Dalian, 116023, China


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Creative Commons License
© 2015 Wei and Yun;

open-access license: This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International Public License (CC-BY 4.0), a copy of which is available at: https://creativecommons.org/licenses/by/4.0/legalcode. This license permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

* Address correspondence to this author at the Dalian Maritime University; Liaoning Dalian 116025, China; Tel: 13332267609; E-mail: 13332267609@189.cn


Abstract

This paper analyzes the factors influencing cash flows and divides them as certainty factors and uncertainty factors; it mainly discusses the uncertainty factors causing change of cash flow. For the characteristics of uncertainty of cash flows in real estate project, we adopted probability theory and mathematical statistics to balance and estimate the cash flows. Then the computer simulation method for uncertainty factors based on Beta distribution and normal distribution is proposed, with the prediction method of cash inflow and outflow. Illustrated by the case of actual real estate projects, we provided financial evaluation by traditional evaluation methods and simulation methods of uncertainty factors and compared the evaluation results. The experiment results show that the improved method has more scientific and accurate performance in basic data, compared to the traditional method, and it can acquire more reliable Evaluation results.

Keywords: Beta distribution, cash flow, estimation, financial evaluation, real estate.