Application of fuzzy set theory in assessing the economic efficiency and risk of investment projects under conditions of uncertainty

Abstract

This article describes an increasingly popular non-traditional approach to assessing the effectiveness of investment projects under conditions of uncertainty - the fuzzy set method. Many will agree that the key factor in analyzing the effectiveness of investment projects is the analyst’s ability to predict future values of key financial indicators. The fate of the project, and ultimately the well-being of both the investor and the analyst himself, depends on how accurately he determines future cash flows, interest rates, the company’s capabilities and its flexibility. The article is devoted to the current problem of evaluating complex investment projects under conditions of risk and uncertainty. The main methods of risk accounting are considered and their main disadvantages are described in detail. As an alternative method, the author proposes the use of fuzzy set theory, which has recently become increasingly popular among specialists in various fields. The article shows that the theory of fuzzy sets is one of the most effective mathematical theories aimed at processing uncertain information and largely integrating known approaches and methods. A mathematical model was also proposed for calculating the magnitude of the risks of investment projects based on the theory of fuzziness.