企業財務知識培訓資料(ppt 24頁)（英文版）

企業財務知識培訓資料內容提要：
Note that Project S could be repeated after 2 years to generate additional profits.
Use replacement chain to calculate extended NPVS to a common life.
Since S has a 2-year life and L has a 4-year life, the common life is 4 years.
What is real option analysis?
Real options exist when managers can influence the size and riskiness of a project’s cash flows by taking different actions during the project’s life.
Real option analysis incorporates typical NPV budgeting analysis with an analysis for opportunities resulting from managers’ decisions.
What are some examples of real options?
Investment timing options
Abandonment/shutdown options
Growth/expansion options
Flexibility options
An Illustration of Investment Timing Options
If we proceed with Project L, its NPV is $6,190. (Recall the up-front cost was $100,000 and the subsequent CFs were $33,500 a year for four years).
However, if we wait one year, we will find out some additional information regarding output prices and the cash flows from Project L.
Investment Timing (Continued)
If we wait, there is a 50% chance the subsequent CFs will be $43,500 a year, and a 50% chance the subsequent CFs will be $23,500 a year.
If we wait, the up-front cost will remain at $100,000.

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