Real Options : Evaluating Corporate Investment Opportunities in a Dynamic World

What is the correct price to pay for a brand?When should you cease operating an asset?What should the maximum investment in a research project be?How much should you buy or sell technology or a licence for?Real option analysis allows us to make the right decision at the right time.

Providing for the first time an integrated framework that can address decisions under an extreme form of uncertainty, real options analysis is one of the most important developments in business decision analysis of the last century.

Real option analysis enables us to integrate our decisions on investment, operations and disinvestment, and is altering economics, strategy, psychology and other disciplines.

It follows the understanding that at least one of the value-determining variables is evolving unforecastably, following a random walk, but there will be flexibility in how we respond as that uncertainty unfolds.Real Options is an enlightening guide to the world of real options, explaining the concepts and offering practical information supported by case studies on how to maximize the value of real option analysis to your business.