• TUCS Publication Series
• How to Publish in TUCS Series
• Publication Search
• Publication Graph
• Publication Input
• Publication Input Guide
• JuFo Browser

Flexibility in Investments: Exploratory Survey on How Finnish Companies Deal with Flexibility in Capital Budgeting

Mikael Collan, Stefan Långström, Flexibility in Investments: Exploratory Survey on How Finnish Companies Deal with Flexibility in Capital Budgeting. TUCS Technical Reports 453, Turku Centre for Computer Science, 2002.

Abstract:

Flexibility is an important issue when investments are being planned
and valued. How flexibility inherent in investments is utilised and exploited
is, therefore, of great importance to the accuracy of the plans and the
valuation. This paper describes an exploratory survey, done with leading
Finnish companies, exploring the use of Real Option Valuation (ROV), and
the methods that Finnish corporations use to take flexibility into
consideration, when planning and valuing investments.

We found that real options exist in Finnish investments, but there are very
few companies that have an established methodology of identifying,
categorizing, or valuing them. We also found that Finnish managers have
mixed views about the value of flexibility in investments.

Very few Finnish managers seem to be aware of research done in the field,
but most seem to have an intuitive understanding of how different variables
affect the value of flexibility in an investment.

Files:

Full publication in PDF-format

BibTeX entry:

@TECHREPORT{tCoLa02a,
  title = {Flexibility in Investments: Exploratory Survey on How Finnish Companies Deal with Flexibility in Capital Budgeting},
  author = {Collan, Mikael and Långström, Stefan},
  number = {453},
  series = {TUCS Technical Reports},
  publisher = {Turku Centre for Computer Science},
  year = {2002},
  keywords = {real options, investments, capital budgeting},
}

Edit publication