Optimal use of futures markets when input and output prices are uncertain

The option to change the use of a proper

The option to change the use of a property when future property values and construction costs are uncertain

✍ Åke Gunnelin 📂 Article 📅 2001 🏛 John Wiley and Sons 🌐 English ⚖ 162 KB

## Abstract This paper models the decision to change the use of a property when its value in the current use and the new use, as well as construction costs, are uncertain. In the case of development of vacant land, when cash flows and construction costs are lognormally distributed, the development