HOW TO ANALYZE INVESTMENT PROJECT/THE REAL OPTION APPROACH TO INVESTMENT DECISION MAKING

How to analyze investment project/The real option approach to investment decision making

How to analyze investment project/The real option approach to investment decision making

Introduction

Real options valuation theory uses physical or real assets, unlike financial assets. It is important to note that the traditional approach involves a DCF solution with fixed results and all decisions are taken at the beginning of the investment process, without the ability to change the earlier decision or make new ones. Real approach option is considering several solutions, as a consequence of high uncertainty combined with the ...