Analyzing Engineering Projects Using Real Options -- Intelligent Investments In The Face Of Uncertainty

Topics:
Modeling
Tags:
Boeing Co.,
Roi/Tco,
Research & Development,
Productivity,
Managerial Accounting,
Investment,
Financial Accounting,
Financial,
Finance,
Crystal Ball,
...
Source:
Crystal Ball

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Overview: Boeing performs extensive financial modeling, a requirement given the technical complexity and the long life cycle of our products. One of the techniques we use is called ""Real Options,"" an advanced financial modeling technique that extends standard net present value (NPV) to evaluate risk-adjusted return on investment and cost-versus-risk issues and optimists R&D and strategic project portfolios. Boeing senior management recognizes that business cases for visionary, strategic projects must go beyond NPV analyses, requiring quantitative data on cost and market uncertainty, analytical insights such as risk-adjusted profits, and conclusions about where to invest to increase the probability of project success.

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Format: HTML | Date: Jan 2003 | Pages: 1


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