We solve a model of time to build, in closed form, for the special case where the only option is commencing investment. The ratio of the optimal to the NPV investment threshold is as in the standard analysis of irreversible investment. We then report numerical solutions for the general case...

Cash balances of the firm follow a diffusion process, triggering liquidation when they cross a threshold value. Access to external funds is constrained. Shareholders are impatient. With these assumptions there is a precautionary motive for retaining earnings; the internal cost of funds and local...