APPLICATION OF AHP AND PROMETHEE METHODS FOR RANKING THE PROFITABILITY OF INVESTMENT PROJECTS
DOI:
https://doi.org/10.35120/sciencej0301025tKeywords:
AHP method, PROMETHEE method, projectAbstract
Making a decision about which project is the most profitable is not an easy task, especially when it comes to investments that require large investments. In practice, there are a large number of methods that are applied in order to make the right decision. The aim of this paper is to show, through empirical analysis, the application of AHP and PROMETHEE methods as extremely effective when deciding on the best alternative location for the construction of a mini-hydroelectric power plant. In order to demonstrate the application of these methods and the process of choosing the most profitable project, using these methods, real data obtained by the investor, who has three alternative locations for the construction of a mini-hydroelectric power plant, was used. First, an adequate discount factor, calculated net present value, Internal rate of RETURN project and dynamic investment payback period were selected, in order to then apply the AHP calculation, and then the PROMETHEE method in the Decision Lab 2000 program, based on all previously calculated indicators. The combination of these methods showed which of the projects is the most profitable and which should be implemented. The very application of these methods also showed us that several methods should be used before the final decision is made, in order to choose the most profitable alternative for the investor.
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