Open AccessMethod of Real Options in Managing Investment Projects
Author(s) -
Bohdan Danylyshyn,
Світлана Бондаренко,
Marina Malanchuk,
Kateryna Kucherenko,
Vitalii Pylypiv,
Oleksandr Usachenko
Publication year - 2019
Publication title -
international journal of innovative technology and exploring engineering
Language(s) - English
Resource type - Journals
ISSN - 2278-3075
DOI - 10.35940/ijitee.j9449.0881019
Subject(s) - key (lock) , risk analysis (engineering) , computer science , project management , process (computing) , process management , plan (archaeology) , investment (military) , operations research , business , operations management , economics , engineering , systems engineering , computer security , archaeology , politics , law , political science , history , operating system
A key factor for the success of the project management is the availability of a clear pre-defined plan, minimizing risks and deviations from the plan, efficient management of changes (as opposed to process, functional management, service level management). Using the binomial method to estimate the value of real options, they proceed from the assumption that the number of links is discrete and known in advance. The logic of this approach requires that their number corresponding to the frequency of making the most significant decisions for the project. The nodes of the lattice should be those moments in time in which strategic decisions are made on reducing, developing, switching business, etc. In general, the use of the real options method extends the tools to justify decisions in managing investment projects.