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Estimating the Value of Delaying an Investment Project
  • Estimating the Value of Delaying an Investment Project
  • Estimating the Value of Delaying an Investment Project
Originally published: 29/06/2016 09:52
Last version published: 05/07/2016 09:01
Publication number: ELQ-52078-4
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Estimating the Value of Delaying an Investment Project

Calculate the value of the option to delay

Prof. Aswath Damodaranby Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,092
NYU Stern School of Businesswith NYU Stern School of Business
An Education in PossibleFollow 62
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investmentfinancevaluationproject managementinvestment managementdelay
Description
This model calculates the value of the optino to delay an invesment project It is useful for investment and project management.

Users must define the following inputs:
1. Present cash flow from investing in the project
2. Annualizd standard deviation
3. Initial investment needed to take project
4.Number of years you have rights to project

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School

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Further information

Outputs:
- Stock price
- Strike price
- Expiration
- T. Bond rate
- Variance
- Annualized dividend yield
- Value of the option to delay

Useful for a range of investment projects where inputs are defined


4.5 / 5 (2 votes)

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