Research Question- What is the relationship between a company's liquidity and profitability? Motivation- There are two theoretical views in the literature regarding the relationship between liquidity and profitability: one view is that there is a trade-off between the two where too much...

This paper applies a dynamic programming methodology to the valuation problem for the flexibility to switch. In our model, flexibility provides an investor with the right, or option, to perform a switch between a less profitable and a more profitable project at no cost. In contrast to previous...