The Use of Multi-State Real Options in Project Evaluation and Project Management

• Authors: Krzysztof Targiel
• Languages of publication: EN

Abstracts

EN

This paper presents the outline of the valuation method of development projects in which there are real option situations. The proposed method takes into account the dependence of the project as a result of two independent random economic factors, which are called state variables. Based on binomial trees, and uses multicriteria dynamic programming. Its use should allow not only to make the right decisions about the project, but also to support decision making during its implementation.

Keywords

EN

Evaluation; Project management

PL

Ewaluacja; Zarządzanie projektem

• Publisher: Uniwersytet Ekonomiczny w Katowicach
• Journal: Studia Ekonomiczne
• Year: 2013
• Volume: 137
• Pages: 183-194

Contributors

author

Krzysztof Targiel

References

• Black F., Scholes M. (1973), The Pricing of Options and Corporate Liabilities. "The Journal of Political Economy" 81, No. 3, 637-654.
• Boyle P.P. (1977), Options: a Monte Carlo approach. "Journal of Financial Economics" 4, 323-338.
• Cox J.C., Ross S.A., Rubinstein M. (1979), Option pricing: a simplified approach. "Journal of Financial Economics" 7, 229-263.
• Dixit A.K., Pindyck R.S. (1994), Investment under Uncertainty. Princeton University Press, Princeton.
• Guthrie G. (2009), Real Options in Theory and Practice. Oxford University Press, Oxford.
• Kumar R.L. (2002), Managing risks in IT projects: an options perspective. "Information & management" 40, No. 1, 63-74.
• Myers S.C. (1974), Interactions of Corporate Financing and Investment Decisions- Implications for Capital Budgeting. "The Journal of Finance" 29, No. 1, 1-25.
• Seydel, R.U. (2009), Tools for Computational Finance. Fourth ed. Universitext. Springer, Berlin Heidelberg.
• Trigeorgis L. (1993), Real Options and Interactions with Financial Flexibility. "Financial Management" 22, No. 3, 202-224.
• Weron A., Weron R. (1998), Inżynieria finansowa. WNT, Warszawa.

Identifiers

ISSN

2083-8611