Assessment of the Expected Effect of Portfolio of Projects When Using Real Options

Abstract

The subject of this research is the process of assessment of an expected effect of projects portfolio with using of real options. The following methods are applied: real options and assessment of the investment project through the cost of the real option, discounting of cash flows, synthesis and mathematical modeling. Novelty of article is the systematization of main types of real options and formalization of computing of the expected effect of realization of portfolio of projects in conditions of risk and uncertainty with use of real options. Results of a research are: main types of real options are systematized and the formula for computing of the expected effect of realization of portfolio of projects in which it is shown that calculation of cost is being built in a portfolio or projects of real options, the additional long-term expenses related to using of these options and decrease thereof the general risk of projects and a portfolio in general allows to increase objectivity of such calculations is offered. Conclusions: in the analysis of real options, the real assets is having as basic, it is often impossible to apply settlement formulas to financial options as they significantly differ. Systematization of main types of real options allows to expand the range of the application of management decisions. Use of more objective formula of calculation of the expected effect of realization of projects portfolio with using of real options allows to increase efficiency of projects insurance in conditions of risks and uncertainty and to use additional opportunities for more effective development of a company.