Such alternatives of decisions are called real options, and the method is called
real options analysis (see for example the definitions and examples in the standard financial management textbook of Brigham and Ehrhardt, 2014).
A
real options analysis, however, will prove otherwise.
Real options analysis provides a tool for the successful integration of market information and strategic engineering and economic decisions.
2002), "Using
Real Options Analysis for Evaluating Uncertain Investments in IT" Communications of the AIS, Vol.
Legal scholars have begun to apply
real options analysis to a
For those who would like to know more about
real options analysis, here are some additional sources.
This suggests that entrepreneurs do not understand
real options analysis or are not able to integrate it effectively into their real options thinking.
of the law, (23) very few articles apply
real options analysis to the
At the project level of all companies, however, regardless of their size,
real options analysis will always improve NPV valuations.
The approach described in this paper provides a solution to integrate
real options analysis into evaluation of flexible manufacturing systems.
Uncertainties must exist during the software acquisition process; otherwise, the
real options analysis becomes useless as everything is assumed to be certain and known.
2006): "Application of
real options analysis for pharmaceutical R&D project valuation--Empirical results from a survey", Research Policy, vol.
