Evaluating strategic investments: Real options´ role in new manufacturing technology projects

The decision to invest, particularly in new manufacturing tecnologies, is often hampered by using conventional methods of capital investment analysis. Limitations of current approaches are discussed and new frameworks that are being presented in the literature with regard to strategic concern are analysed. It is discussed how real options, a relatively recent technique from this the finance area, may provide the ability to measure some of the benefits that are presently treated.