This paper circulates around the core theme of UMUC FIN660 Real Options Homework together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Question
Real Options Homework
The assignment is to evaluate both parts, the traditional NPV calculation as well as the Real Options approach. The probability of a successful project (or pilot) is now .65 (instead of .5) and the probability of an unsuccessful project is .35 (instead of .5).
What is the expected NPV in each case now? What do you recommend? Why?
If you don`t know the probability of success for the pilot, is there a value that is critical to your recommendation? Is there a probability of success above or below which you will recommend undertaking the pilot and below or above which you will recommend a go/ no go decision on the underlying project without undertaking a pilot test?
