Method of Real Options in Managing Investment Projects
Bohdan Danylyshyn1, Svitlana Bondarenko2, Marina Malanchuk3, Kateryna Kucherenko4, Vitalii Pylypiv5, Oleksandr Usachenko6
1Bohdan Danylyshyn, Department of Regional Studies and Tourism, Kyiv National Economic University Named After Vadym Hetman, Kyiv, Ukraine
2Svitlana Bondarenko, Department of Economic Management of Natural Resources, Institute of Market Problems and Economic-Ecological Research of the NAS of Ukraine, Odessa, Ukraine
3Marina Malanchuk, Department of Economics and Financial Support, National University of Defense of Ukraine named after Ivan Chernyakhovsky, Kyiv, Ukraine
4Kateryna Kucherenko, Department of Information Activity and Media Communications, Odessa National Polytechnic University, Odessa, Ukraine
6Vitalii Pylypiv, Department of Regional Studies and Tourism, Kyiv National Economic University, Kyiv, Ukraine
7Oleksandr Usachenko, Legislation Institute of The Verkhovna Rada of Ukraine, Assistant Commander of the Battalion for Legal Work of the Military Unit of the Armed Forces of Ukraine.
Manuscript received on 09 August 2019 | Revised Manuscript received on 17 August 2019 | Manuscript published on 30 August 2019 | PP: 2696-2699 | Volume-8 Issue-10, August 2019 | Retrieval Number: J94490881019/19©BEIESP | DOI: 10.35940/ijitee.J9449.0881019
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: 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.
Index Terms: Binomial Approach, Real Options, Investment Project, Project Management, Underlying Asset Lattice, Option Valuation Lattice, Decision Lattice.
Scope of the Article: Disaster Management