Real Options Valuation Tool

Current value of the project.

Value obtainable by abandoning the project (e.g., selling assets).

Years until the option to abandon expires.

Annual risk-free rate.

Annualized volatility of the project's value.

Present value of expected cash flows from the project.

Cost to undertake the project if deferred.

Years until the deferral option expires.

Annual risk-free rate.

Annualized volatility of the project's value.

Continuous rate of cash flow erosion (e.g., lost profits or maintenance costs) during deferral.