A better understanding of why NPV undervalues managerial flexibility

Engineering Economist

Volumn 47, Issue 4, 2002, Pages 418-435

  Fetnstein, Steven P ^a   Lander, Diane M ^b  

^a BABSON COLLEGE   (United States)

^b UNIVERSITY OF SOUTHERN MAINE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

CAPITAL BUDGETING; COMPLEX APPLICATIONS; FINANCIAL ANALYSTS; MANAGERIAL FLEXIBILITY; MATHEMATICAL COMPLEXITY; REAL OPTION VALUATIONS; REAL OPTIONS ANALYSIS; WEIGHTED AVERAGES;

BUDGET CONTROL; RESOURCE VALUATION; RISK ASSESSMENT; TOOLS;

MANAGERS;

EID: 1642540849     PISSN: 0013791X     EISSN: 15472701     Source Type: Journal    
DOI: 10.1080/00137910208965043     Document Type: Article

References (2)

1. A notable example for this paper is SACHDEVA, K., and P.A. VANDENBERG, 1993, "Valuing the Abandonment Option in Capital Budgeting - An Option Pricing Approach," Financial Practice and Education (Fall), pp. 57-65. In this paper, the authors value an abandonment option using the binomial option pricing model
2. 2" LANDER, D.M., and G.E. PINCHES, 1998, "Challenges to the Practical Implementation of Modeling and Valuing Real Options," Quarterly Review of Economics and Finance, Volume 38, Special Edition, pp. 537-567.