Real options valuation (ROV) considers the managerial flexibility to make ongoing decisions regarding implementation of investment projects and deployment of real assets. This paper introduces a simulation-optimization approach to valuing real investment options based on a model containing several decision variables and realistic stochastic inputs. Using this approach, the value of a portfolio ...

This paper studies optimal investment and the dynamic cost of income uncertainty, applying a stochastic programming approach. The motivation is given by a case study in Finnish agriculture. Investment decision is modelled as a Markov decision process, extended to account for risk. A numerical model for computing the dynamic uncertainty cost is presented, applying the classical expected value of...

The decision-theoretic rough set model is adopted to derive a profit-based three-way approach to investment decision-making. A three-way decision is made based on a pair of thresholds on conditional probabilities. A positive rule makes a decision of investment, a negative rule makes a decision of noninvestment, and a boundary rule makes a decision of deferment. Both cost functions and revenue f...

Our objective in this paper is to develop a decision-making model to assist decision-makers and researchers in understanding the effect of multiple criteria decision-making on a capital budgeting investment. This decision-making model helps decision-makers with reducing decision-making time and choosing a suitable decision alternative for a capital budgeting investment within the companies’ goa...

Proper investment decision making is key to success for every investor in their efforts to keep pace with the competitive business environment. Mitigation of exposure to risk plays a vital role, since investors are now directly exposed to the uncertain decision environment. The uncertainty (and risk) of an investment is increasing with the increased number of competing investors entering to mar...

using firm-level panel data for korean mnes, we make a distinction between being the only affiliate of a parent firm and being the one of the multiple affiliates of a parent firm. comparisons of correlations between purchases and sales of each group of the foreign affiliates show distinctive difference in the motivations of fdi and the multinational activities, due to the difference in the numb...

This paper studies optimal investment and the dynamic cost of income uncertainty, applying a stochastic programming approach. The motivation is given by a case study in Finnish agriculture. Investment decision is modelled as a Markov decision process, extended to account for risk. A numerical framework for studying the dynamic uncertainty cost is presented, modifying the classical expected valu...