To have a real option means to have the possibility for a certain period to either choose for or against making an investment decision, without binding oneself up front. The real option rule is that one should invest today only if the net present value is high enough to compensate for giving up the
Decision Analysis and Real Options: A Discrete Time Approach to Real Option Valuation
✍ Scribed by Luiz E. Brandão; James S. Dyer
- Publisher
- Springer US
- Year
- 2005
- Tongue
- English
- Weight
- 744 KB
- Volume
- 135
- Category
- Article
- ISSN
- 0254-5330
No coin nor oath required. For personal study only.
📜 SIMILAR VOLUMES
The purpose of this paper is to demonstrate in a simple framework how decision tree analysis (DTA) and real options approach (ROA) yield the same results when markets are complete. The common scepticism regarding DTA has its roots in the incorrect assumption that one can apply the same discount rate
The real-options paradigm serves as a new platform in the evaluation of intellectual capital assets. A prominent case of real-options applications in intellectual capital is R&D investment, since R&D constitutes a major part of a firm's structural capital as well as a major field of realoptions appl