Resumen
AbstractThe policy and programme for industrial decentralization in South Africa forms an integral part of South Africa's total economic development strategy for the future. Therefore, in the wake of South Africa's revised regional economic development proposals - which have resulted in the introduction of predominantly cash-based industrial decentralization incentives relative to their predominantly tax-based precursors - the author purports to outline the tenets underlying a probabilistic approach to the evaluation of risk-related investments with reference to their location in industrial development/deconcentration points in South Africa. To this end, the author seeks to illustrate that in evaluating capital investment proposals - within the context of regional decentralization - cash flow streams are one of the principal determinants of project worth in the analytical process. Moreover, although much of contemporary capital budgeting work is based on assumed 'conditions of certainty' a probabilistic approach to cash flow formulations is adopted in this article in the conviction that this affords considerably more insight into the problems of project evaluation and optimal selection.