Valuation of an IT project using the real options analysis : focusing on the case of a Korean IT venture firm = 실문옵션분석을 이용한 IT 프로젝트의 가치평가 focusing on the case of a Korean IT venture firm

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Under traditional analysis of the capital budgeting, it is assumed that management cannot react to deviation from the expected scenario of cash flows. In the real world, however, the expected scenario will likely not be realized when new information arrives and uncertainty in the marketplace gets resolved. Uncertainty and risk can be influenced through “managerial flexibility”, which becomes a central instrument for value creation. The real options framework takes this managerial flexibility into account. It is distinguished from its response to uncertainty. It is not appropriate to use the traditional tools when valuing the rapid developing IT projects, which have more uncertainties than other industries. We evaluate an IT project by using the real options analysis. When we perform net present value calculation, the project has a negative net present value, and it would be rejected without flexibility. However, as applying the real options analysis to that project, we identify the various types of real options of the project. The real options analysis value is much higher than the net present value that fails to value these flexibilities. We come to know that the extra value of flexibility makes the project worthwhile.
Yang, Dong-Hoon양동훈
한국정보통신대학원대학교 : 경영학부,
Issue Date
392107/225023 / 000993857

학위논문(석사) - 한국정보통신대학원대학교 : 경영학부, 2002, [ iv, 78 p. ]


실물옵션분석; 실물옵션; Real Options Analysis

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School of Management-Theses_Master(경영학부 석사논문)
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