THE STRATEGIC OPTIONS IN INVESTMENT PROJECTS VALUATION

Violeta Săcui () and Franca Dumitru ()
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Violeta Săcui: WEST UNIVERSITY OF TIMIȘOARA
Franca Dumitru: TIBISCUS UNIVERSITY OF TIMISOARA

Anale. Seria Stiinte Economice. Timisoara, 2012, vol. XVIII/Supplement, 494-499

Abstract: The topic of real options applies the option valuation techniques to capital budgeting exercises in which a project is coupled with a put or call option. In many project valuation settings, the firm has one or more options to make strategic changes to the project during its life. These strategic options, which are known as real options, are typically ignored in standard discounted cash-flow analysis where a single expected present value is computed. This paper presents the types of real options that are met in economic activity.

Keywords: investment project; real option; valuation; strategic; flexibility (search for similar items in EconPapers)
JEL-codes: D81 G31 (search for similar items in EconPapers)
Date: 2012
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