The importance of risk management in the economic evaluation of projects

Abstract

Projects in the real world do not always follow definitive information, and change along with uncertainty is a well-known factor in most management and engineering activities. Economic and political factors are also among the factors that are effective in changing future parameters. Although it is easy to recognize changes, it seems difficult to involve them in economic studies and especially in the economic evaluation of projects. This factor is overlooked in many studies, given that the existence of risk in economic forecasts of revenue and expenditure forecasts and financial processes is essential. This research with a library approach examines the importance of risk management in the economic evaluation of projects. The results show that despite the costs incurred by financial processes as a result of implementing risk management, this issue should still be considered in the economic evaluation of projects.

Keywords

• risk management
• risk
• economic evaluation
• engineering economics