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.
Volume (Year): 2009 (2009)
Issue (Month): 4 ()
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