Ivey Publishing

Product Details

Introduction to Real Options
Product Number:
9B05N015
Publication Date:
08/12/2005
Revised Date:
10/04/2009
Length:
8 pages (8 pages of text)
Product Type:
Note
Source:
Ivey
The real options approach to capital budgeting uses an options-based analysis to evaluate the real (as opposed to the financial) potential of projects. By charting the options as a series of decision points and events, managers can understand the risks and rewards of the projects, and more fully assess their opportunities. This note introduces the real options approach and describes the four main categories: expansion and follow-on options, timing and delay options, abandonment options and options that introduce flexibility into production. The expansion option is discussed in detail, including sample calculations and decision trees.
Issues:
Disciplines:
Finance
Setting:
2005
Intended Audience:
Undergraduate/MBA
Price:
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download
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