This article evaluates Tourinho's (1979b) work as one of the earliest contributors to the real options literature. His model pioneered the application of risk neutrality to uncertain investments, but his originality of introducing an option-holding cost albeit to overcome the extraction paradox...

We study optimal replacement and abandonment decisions for real assets, when both revenues and costs are uncertain and deteriorate with age. We develop an implicit representation of the renewal boundary as the solution to a set of simultaneous equations. This quasi-analytical method has the...

We examine the possibilities of premature and postponed replacement in a deterministic infinite horizon model when there is technological progress. Both revenue and operating cost deteriorate with age, but at different rates. The optimal deterministic replacement time is an implicit solution...

The optimal replacement policy for an asset subject to a stochastic deteriorating operating cost is determined for three different tax depreciation schedules and a known re-investment cost, as the solution to a two-factor model using a quasi-analytical method. We find that tax depreciation...

Before taking strategic actions in property investments, consider the type and number of expansion, contraction and suspension alternatives and the future profit volatility.The optimal investment strategy for a current or prospective property owner should reflect the expected variability of...

Property development activities often occur in stages, which are appropriately modeled as sequential American exchange property options, where there are interim expenditures required in order to keep the property development options alive. Normally American exchange options require a numerical...