Proposing a new function for evaluation of the financial risk of construction projects using Monte Carlo method: Application on Iranian construction industry

In this paper, the financial risk of construction projects is investigated. This process is carried out by proposing a new function based on three design variables, i.e. Cost List (CL), Material Cost (MC) and Final estimation Cost (FC). Deviations of these parameters are evaluated in ten years period, from 2004 to 2014. In the next step, distribution function and their relative parameters (mean and standard deviation) are determined. The efficiency of the proposed function is verified using the Monte Carlo simulation approach. The proposed simulation process has an ability to evaluate the economic conditions of construction projects. Moreover, the suggested procedure helps to evaluate the financial risk with suitable accuracy.