This paper models the decision to quit smoking like an investment decision where the quitter incurs a sunk withdrawal cost today and forgoes their consumer surplus from cigarettes (invests) and hopes to reap an uncertain reward of better health and therefore higher utility in the future...

This paper models the decision to quit smoking like an investment decision where the quitter incurs a sunk withdrawal cost today and forgoes their consumer surplus from cigarettes (invests) and hopes to reap an uncertain reward of better health and therefore higher utility in the future...

An improved understanding of investment decisions on low-carbon technology will greatly facilitate assessing the effectiveness of carbon emissions mitigation policies. We use the example of implementing CCS (carbon capture and storage) within ICL (indirect coal liquefaction), a controversial...

This paper provides a non-technical presentation of the theoretical foundations of corporate financial decision making and the net present value (NPV) rule. Our objective is to show that the concepts of value and value creation arise from a single, unified framework that is firmly rooted in...

This article illustrates how the real options approach to public project evaluation is executed with a large-scale forest road construction project in one of the national park regions in Japan as a case study. Paying due attention to the existence of specified beneficiaries who want to make sure...

A valuation approach is presented to price flexible leases with expansion, contraction, and/or cancelation options from the corporate tenant perspective. This model uses the real option valuation approach and determines the flexibility value or the option premium of a lease. This premium is the...

Recent developments in the oil prices have created new opportunities for trade. When the crude oil price is in contango, it may be profitable to enter into a forward contract and sell oil in the future for a delivery price higher than the current spot price. However, to take advantage of this...