Established Deterministic Investment Appraisal versus Uncertainty in Investment When it
comes to investing in an infrastructure project, the conventional approach is to evaluate risk …

Financial and real options values depend on several variables, including the volatility
parameter. Real option volatility arises from the uncertainty of forecasts, and thus, is more …

Project valuation, as a decision-making tool for initiating investments in projects, should be
able to value project flexibilities and incorporate reasonable risk preferences of relevant …

The article presents a method for estimating the value of a real option using probabilistic
present worth analysis. The method is shown to capture the upside value of a real option in …

This paper develops an optimal replacement strategy for capital intensive equipment with
long delivery lead time. The strategy is based on an extended version of the real options …

Recent publications have shown the role that options play in addressing the uncertainty,
risk, and fairness in public–private partnership (PPP or P3) agreements in toll road projects …

This article gives a cash flow view of real options in distinction from the majority of the
literature on real options. Via a cash flow view, the article shows that real options can fit …

Purpose This paper aims to examine the applicability of real options methodology with
respect to developing internal transfer pricing mechanisms. A pervasive theme in existing …

This article presents a real options model that fits managerial cash flow estimates (optimistic,
likely, and pessimistic projections) to a continuous geometric Brownian motion (GBM) cash …

Real options analysis is an adequate tool with which to value companies and projects under
investment uncertainty. Nevertheless, the estimation of the volatility to be employed in the …