Abstract:

The real options methodology is becoming a more and more wide-spread instrument for evaluation of economic efficiency of investment projects not only in the industries, where it was traditionally applied – the pharmaceutical, mining andinformation technology branches, but in all economic spheres, where new ideas and innovation projects appear, whose results strongly depend on whether a manager can be flexible depending on how the project works – be it good sales and high margins or low demand and high input costs. Our research is devoted to the development of the real options methodology and recommendations for its application in projects with a high level of uncertainty. The research suggests building a sequential compound real option with an individual analysis of each project evaluation stage, which creates new products or services. The methodology helps the companies developing new project solutions to make balanced decisions and not to reject projects with a negative value calculated under traditional methodologies but having a high potential thanks to active competent management of internal variability inherent in innovative projects.