A Valuation Model for Project Standby Capacity
This paper addresses the issue of project standby capacity optimization for capital budgeting. A detailed analysis and case study show that this is a particular real-option based situation, which solicits the use of statistical simulation. The method can be recommended as a useful heuristic for corporate capital budgeting, as well as for college-level class instruction.
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Volume (Year): 2009 (2009)
Issue (Month): 4 ()
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References listed on IDEAS
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- Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
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- Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
- Terence C. Mills, 2006. "Introductory Econometrics: Using Monte Carlo Simulation with Microsoft Excel -super-®," Journal of Time Series Analysis, Wiley Blackwell, vol. 27(6), pages 943-944, November.
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- Wiegand, Ryan E., 2006. "Introductory Econometrics: Using Monte Carlo Simulation With Microsoft Excel. Humberto Barreto and Frank M. Howland," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 1730-1731, December.
- Barreto,Humberto & Howland,Frank, 2006. "Introductory Econometrics," Cambridge Books, Cambridge University Press, number 9780521843195, December.
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