any one know several methods of analysing risk and uncertainty of a project?

Question

when deciding to go ahead with one project rather than another after calculating NPV

Answer 1

For risky variables that you have estimated or made assumptions about in calculating the NPV, develop probability distributions of the values they can take on. These can be continuous or discrete. Then use software such as @RISK, which undertakes monte carlo simulations to develop a probability distribution for the NPV. This will give you the expected value for NPV and variance.

When choosing between projects, it is usually best to pick the one with the higher NPV regardless of variance. High variance may not be undesirable. It depends on the context - how much of the risk is diversified away by other investments and the presence of systematic (undiversifiable) risk.