3.2.1. Balance Evaluation of the Project Management Phase: Cash Flows Analysis

In the case of projects for the enhancement of public buildings that provide, as a form of public-private partnership, only the assignment in management, without the need for investments by private parties, it is sufficient to resort to an examination of cash flows (Cash Flow Analysis—CFA) in the running year, using an analysis structure illustrated later, whose result must be equal to or greater than zero.

3.2.2. Evaluation of the Profitability Evaluation of the Project: Discounted Cash Flow Analysis

Discounted cash flow or discounted cash flow is an evaluation method to assess the investment profitability, based on the current value of flows, according to a risk-adjusted rate, generated by the investment.

Usually, a project implementation does not represent an immediate operation:


It is, therefore, necessary to address two problems:


The discounted cash flow analysis criterion is based on the economic principle of the anticipation. The main indicators to verify the profitability of investments are the Net Present Value (NPV) and the Internal Rate of Return (IRR).

The models that use discounted cash flow are widely consolidated, both in the international literature, relating to the valuation of real estate investments and in the manuals used for the professional practice, and in the Italian literature [19–22] to which we refer for further details.

The DCFA is considered the standard tool used in the valuation of real estate investments. The theory that supports it is shared within the community of scholars and professionals, and its results depend substantially on the quality of the inputs, which in general applies to any economic model.

However, it is characterized by some critical aspects, often underestimated; first of all, the uncertainty of the future scenario, from the decision-making point of view, despite the deterministic nature of the inputs can be corrected through sensitivity analysis and simulation models. In these analyzes, necessary decision-making flexibility is required with respect to the current economic scenarios, characterized by a high level of uncertainty relative to some of the variables of the system, endogenous, but above all exogenous.
