We compare the concept of Economic Value Added (EVA) with the traditional Discounted Cash Flows (DCF) method of investment appraisal. We find that DCF suffers from dynamic inconsistency and may approve suboptimal investment decisions. In contrast, EVA does not suffer from these shortcomings and...

Real option is an interdisciplinary subject combining finance, strategy and IT. RO analysis is a powerful financial tool that meshes nicely with the complexities of emerging technology projects that inherently carry significant uncertainty, but also represent great potential value for the firm....