Real Options Analysis: Tools and Techniques for Valuing Strategic Investment and Decisions, 2nd Edition

708 Pages·2006·11.64 MB·English

by  Mun

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Real
Options
Analysis
Tools and Techniques
for Valuing Strategic
Investments and Decisions
Second Edition
JOHNATHAN MUN
John Wiley & Sons, Inc.
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Additional Praise for the First Edition of
Real Options Analysis
“Many books on real options can be intimidating. Mun offers a pragmatic, re-
liable, and entertaining guide. Complex concepts and formulas are brilliantly
interspersed with well-chosen examples and step-by-step walk-throughs from
a variety of industries.”
—Shota Hattori
President and CEO, Kozo Keikaku Engineering, Inc. (Japan)
“Finally, a real options analysis book that is technically sophisticated enough
to be useful, and practically written so that it can actually be used. It is des-
tined to become thehandbook of real options.”
—A. Tracy Gomes
President, Intellectual Property Economics, LLC (USA)
“The clarity and comprehensive coverage makes it one of the best guides
for all practitioners . . . coupled with state-of-the-art financial tools on
CD-ROM.”
—Michael Sim
Partner, Moores Rowland International (Hong Kong)
“Mun certainly has earned the reputation of being an expert on the subject
...consultants, analysts, decision makers, and engineers will be all over this
book and its software.”
—Phyllis Koessler
Managing Director, Koessler and Associates (Switzerland)
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“The book is far and away the clearest, most comprehensive guide to real
options analysis to date, and is destined to be a classic—it is a complete
guide to the practical application of real options analysis. It strikes a superb
balance between solid intuition, rigorous analysis, and numerous practical
examples.”
—John Hogan, Ph.D.
Boston College (USA)
“The book leads the field in real options analytics and is a must-read for
anyone interested in performing such analyses. Mun has made a formidable
subject crystal clear and exponentially easy for senior management to under-
stand. Monte Carlo simulationand real optionssoftware alone is worth the
book price many times over.”
—Morton Glantz, Renowned educator in finance, author
of several books, financial advisor to government (USA)
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Real
Options
Analysis
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Real
Options
Analysis
Tools and Techniques
for Valuing Strategic
Investments and Decisions
Second Edition
JOHNATHAN MUN
John Wiley & Sons, Inc.
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Copyright © 2006 by Johnathan Mun. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in
any form or by any means, electronic, mechanical, photocopying, recording, scanning, or oth-
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Library of Congress Cataloging-in-Publication Data:
Mun, Johnathan.
Real options analysis : tools and techniques for valuing strategic investments and
decisions / Johnathan Mun.—2nd ed.
p. cm.—(Wiley finance series)
Includes index.
ISBN-13: 978-0-471-74748-2 (cloth/cd-rom)
ISBN-10: 0-471-74748-3 (cloth/cd-rom)
1. Real options (Finance) I. Title. II. Series.
HG6042 .M86 2006
332.63—dc22 2005050194
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
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Specially dedicated to my wife, Penny, the love and sunshine of my life,
for these amazing first few years, and with great anticipation of many
more to come. Without your encouragement, advice, and support,
this second edition would never have taken off.
“If you will walk in my ways and keep my requirements,
then you will govern my house and have charge of my courts,
and I will give you a place among these standing here.”
Zechariah 3:7 (NIV)