Real Options: A Practitioner's Guide - Tom Copeland & Vladimir AntikarovTexere, 2001, Hardback in Dust Wrapper.
Condition: Very Good — in Very Good Dust Wrapper. Gently bruised at the head of the spine with a little wear to the dust wrapper as a result.
From the cover: “Determining the feasibility and the priority of potential investments is critical in business decision making. A new method for estimating the value of investments — real options — is gaining ground over the traditional approach of calculating net present value (NPV). Tom Copeland and Vladimir Antikarov argue that in ten years real options will replace NPV as the central paradigm for investment decisions.
This book offers the first practitioner’s guide for understanding and implementing real options in everyday decision making. The authors bring years of experience with dozens of corporations in implementing real options.
Copeland and Antikarov show how NPV is flawed and tends to undervalue investment opportunities. NPV is a static calculation that fails to consider the many options that management has over the lifetime of an investment project. Such options include expanding or extending the project if results are better than expected or scaling down or abandoning the project if it turns out to be worse than expected.
There are chapters that deal with valuing various types of simple options, such as deferral, abandonment, expansion, and contraction of projects, and more advanced options such as compound and switching options. Chapter 2 shows how Airbus Industrie uses real options in its marketing efforts and discusses the difficulties encountered in implementing real options. Chapter 7 shows how to write an Excel spreadsheet to value simple options, combinations of them, and compound options. Chapters 9 and 10 discuss ways of modelling uncertainties.
The analysis is enriched with case histories and case solutions. The end-of-chapter questions and problems provide both experience and additional insights into the application of real options..”