New applications Filmmaking: Has the real options approach been applied to valuation and strategy in the film industry?
Online Learning: What’s the real options perspective on the following question: Should a state university expand by investing a large amount of money in buildings, or putting everything on the web and presenting a web-based education? A First Look At Real Options Explain the title of your book. When a company invests in a physical asset, they’re also acquiring options – opportunities to make decisions in the future, based on the outcome of things that are uncertain today. We call these real options to distinguish them from option contracts traded in the financial markets. Example: the value of a new manufacturing plant includes the option to expand if sales take off and option to abandon if sales die. >> back to top Tell me more about options. In common use, the word option is used to suggest alternatives or choices. For real and financial options, the word has a different meaning. An option is the right, but not the obligation, to take an action. For example, an option contract is the
