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
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
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.