realoptionarvioinneilla
Realoptionarvioinneilla, often translated as real options valuation, is a financial modeling technique used to value projects or assets that possess flexibility and strategic choices. Unlike traditional Net Present Value (NPV) analysis, which assumes a fixed course of action, real options valuation explicitly accounts for the embedded value of management's ability to alter decisions in response to changing market conditions. This approach views a project not as a single, irreversible investment, but as a portfolio of options.
The core idea is that certain project features, such as the ability to expand, contract, abandon, delay,
Common methods for valuing real options include binomial trees, Black-Scholes models (adapted for real assets), and