real options

Reducing initial investment image

Reducing Initial Investment

Reducing initial investment is desirable from a cash management standpoint, but also from a risk standpoint.  Tactics to reduce initial investment in a project are listed below. Staged investment Make a partial investment, and wait for more information before making follow-up investment. Example: Buy land.  Develop if it is desirable to do so. Example: R&D …

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What is Project Flexibility and Where Can I Find It?

The idea of project flexibility is conceptually desirable and accepted in both corporate strategy and in the design decisions that go into product development.  The problem is that it has generally been difficult to quantify the value associated with flexibility, and therefore difficult to justify. Developing products and services always involves unknowns.  Uncertainty in market …

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