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    Valuation Methods From Technology Innovation

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    Miguel Angel Herrera Triviňo
    Real options valuation uses decision trees to evaluate technological innovations. Decision trees model scenarios and factors like deferring or changing a project. Real options give management flexibility to increase value. The value of an innovation is calculated using a decision tree that considers application areas, market impacts, and project values at each node. Companies create value by investigating market impact, costs, and affected actors, then using decision trees to estimate costs in different scenarios and make optimal decisions.

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    Valuation Methods From Technology Innovation

    Uploaded by

    Miguel Angel Herrera Triviňo
    59 views1 page
    Real options valuation uses decision trees to evaluate technological innovations. Decision trees model scenarios and factors like deferring or changing a project. Real options give management flexibility to increase value. The value of an innovation is calculated using a decision tree that considers application areas, market impacts, and project values at each node. Companies create value by investigating market impact, costs, and affected actors, then using decision trees to estimate costs in different scenarios and make optimal decisions.

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    Real options valuation uses decision trees to evaluate technological innovations. Decision trees model scenarios and factors like deferring or changing a project. Real options give management flexibility to increase value. The value of an innovation is calculated using a decision tree that considers application areas, market impacts, and project values at each node. Companies create value by investigating market impact, costs, and affected actors, then using decision trees to estimate costs in different scenarios and make optimal decisions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    59 views1 page

    Valuation Methods From Technology Innovation

    Uploaded by

    Miguel Angel Herrera Triviňo
    Real options valuation uses decision trees to evaluate technological innovations. Decision trees model scenarios and factors like deferring or changing a project. Real options give management flexibility to increase value. The value of an innovation is calculated using a decision tree that considers application areas, market impacts, and project values at each node. Companies create value by investigating market impact, costs, and affected actors, then using decision trees to estimate costs in different scenarios and make optimal decisions.

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    VALUATION METHODS FROM

    TECHNOLOGY INNOVATION
    REAL OPTIONS METHOD CALCULATED WITH
    DECISION TREES

    REAL OPTION

    Management has the option to defer the investment for a period of


    time, temporarily suspend operations, change inputs or outputs,
    reduce expected profits or reduce expected losses on the investment,
    temporarily suspend operations, change inputs or outputs, scale
    down or resume operations after a temporary shutdown.
    All these opportunities represent options on real assets that allow
    management to increase the value of the innovation project, and are
    therefore called REAL OPTIONS.

    DECISION TREE

    Decision trees are tools that allow the use of real options
    to project the possible scenarios and factors that are
    taken into account to calculate the value of a
    technological innovation.
    A naïve approach to valuing projects with real options
    would be simply to include decision nodes corresponding
    to project options into a decision tree model of the project
    uncertainties, and to solve the problem using the same
    risk-adjusted discount rate appropriate for the project
    without options.

    PROCESSES RELATED TO THE CALCULATION


    OF THE VALUE OF TECHNOLOGY
    Step 1: Define the factors that add or detract value to this
    technology and give them a weighted value.
    Step 2: Define the field of application, and how it influences
    the different markets.
    Step 3: Build a decision tree estimating the different values
    that the project can take.
    Step 4: Estimate the value of the project or technological
    innovation taking into account all the nodes or interactions
    of the tree.

    CREATE VALUE

    Companies can create value for their technological innovation projects by conducting an investigation of the
    impact it may have on the market, the costs of reproducing and applying this technology and the different
    actors that will be affected.
    Make an estimation of the cost in different scenarios, and use a decision tree tool to estimate each of these to
    make an optimal decision.

    B Y D A N I E L M O R A L E S 8 0766048
    GROUP: 212032_18

    CONTEXTO: WWW.SITIOINCREIBLE.MX. V A L U A T I O N A N D N E G OTIATION OF TECHNOLO G Y


    APRIL 4 2021

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