Real Options and Investment Decision Making
نویسنده
چکیده
Real options analysis seeks to value flexibility in investment opportunities – both the flexibility offered to management once the investment is undertaken, and the flexibility of delaying the investment through time. The real options approach contrasts with the standard approach to investment decision making, the net present value (NPV) approach, which assumes the investment opportunity is a now-or-never decision, and once the investment is undertaken, there is no scope for managers to react to new information and to change course.
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