How does Changing the Penetration of Renewables and Flexibility Measures Affect the Economics of CCS Penetration?

Lupo, Sara; Reiner, David

doi:10.1016/j.egypro.2017.03.1891

Cited by 1 publication

(1 citation statement)

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“…Real options can be divided into investment timing option, operational flexibility option, abandonment option, and growth option. These options can be taken during the execution of the project with the aim of maximizing results or eliminating losses (Copeland and Antikarov, 2002;Lupo and Reiner, 2017;Santos et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

Strategic flexibilities: valuation of a company with the application of the Real Options Theory

Martinez

Batistela

Simões

2019

BJO&PM

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Goal: In this paper, a binomial model is proposed to evaluate the option of deferring an investment and expanding the operational scale of a forest-based company that will perform the de-duplication of Pinus sp. and will market packaging for storage and transportation of vegetables. Design/Methodology/Approach: The proposed model measured the options of deferring an investment and expanding the operational scale of the forest-based company. In this perspective, the model of evaluation used was the binomial model in discrete time using the Real Options. Results: It was observed that the inclusion of management flexibilities in the decision making process has added value to the investment project; therefore, the project of investments in real assets proved to be economically feasible. Limitations of the investigation: The studies that address the corporate finance framework based on real data are a restrictive factor, due to the lack of collaboration of companies, that is, the availability of information that is usually classified. Practical implications: The study was based on the real data of a company; therefore, it can be adopted as a stimulus to the Real Options approach to the decision making of entrepreneurs or researchers. Originality/value: The focus of the study was to contemplate the managerial flexibilities of an industry of the secondary sector of the Brazilian economy, which performs the unfolding of wood, demonstrating the innovation of the technique approach used in this market segment.

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Section: Introductionmentioning

confidence: 99%