Title
General trigger values of optimal investment
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
London ,
Subject
Economics
Source (journal)
Applied economics letters. - London
Volume/pages
6(1999) :5 , p. 287-290
ISSN
1350-4851
ISI
000080747600007
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
We consider a general real option model which allows finite values for all parameters influencing the value of waiting in case of uncertain and irreversible investment. We show that the traditional net present value rule and the commonly known Dixit-Pindyck approach are nested in the same general real option model and hence produce optimal investment decisions only in their specific scenario.
E-info
https://repository.uantwerpen.be/docman/iruaauth/3dd3f9/6fb21cf7b6b.pdf
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