Fontes, Dalila B. M. M.; Camões, Luís; Fontes, … - Faculdade de Economia, Universidade do Porto - 2007
In this work we address investment decisions using real options. A standard numerical approach for valuing real options is dynamic programming. The basic idea is to establish a discrete-valued lattice of possible future values of the underlying stochastic variable (demand in our case). For most...