Application of Simulation Method in Financial Evaluation of Construction Projects

In order to provide a reliable foundation for project decision, some sorts of financial indexes of the project, such as NPV, IRR etc, should be accurately estimated out in the earlier stage. However, these indexes appear in the future randomly, and their estimation in the earlier stage is at risk. In this paper, taking the project's NPV as example and applying simulation method to its estimation, the authors developed a comparatively objective evaluation method of construction projects. Furthermore, the outcome of the simulation method is tested by comparing it with the result of another evaluation method.