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| Real options are the valuable operational choices available to the owners of projects and of businesses.
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| For example, the options to expand, contract, defer or abandon the project (or business).
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| The existence of valuable real options in favour of the owners generally increases the total value of a project or business.
| | == See also == |
| | | * [[Sight draft]] |
| For this reason a real options analysis of a proposal may in some cases result in a decision to proceed with the project, in circumstances where other project evaluation techniques would have led to rejecting the proposal.
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| However, it is also possible that a proposal may grant real options - perhaps inadvertantly - in favour of other parties.
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| In such a case, the other parties might in future exercise their real options ''against'' the interests of the owners, causing losses to the owners.
| | [[Category:Cash_management]] |
| | | [[Category:Financial_products_and_markets]] |
| Such real options in favour of other parties are ''liabilities'' of a project or business, and ''reduce'' the total net value of the project or business.
| | [[Category:Liquidity_management]] |
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| == See also ==
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| * [[Option]]
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| * [[Project appraisal]]
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| * [[Real]]
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| * [[Real options valuation]]
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Latest revision as of 12:36, 2 July 2022
Draft that demands payment at a specified future date.
See also
