REAL Options Analysis
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XL    Name    Date
Time PeriodCashflow
Upside
Cashflow
Downside
Period 0 $ $ (Period 0 cashflow must be negative)
Period 1 $ $
Period 2 $ $ WACC %
Period 3 $ $ Upside probability %
Period 4 $ $ Months to decision
Period 5 $ $ Best NPV
times Prob.
Discounted
Period 6 $ $
Period 7 $ $
Period 8 $ $ Upside NPV $
Period 9 $ $ Downside NPV $
Period 10 $ $

Maximized NPV $
NPV $ $ Expected NPV $

Real Option Value $

The Real Option Value is the difference between the Maximized NPV and the Expected NPV.
The Best NPV is selected from two options: the calculated or zero. The result is
then multiplied by the probability and then discounted back to the present.


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