Yanyan

Appears in Information Systems Research, Vol. 10, No. 1, pp. 70-86, 1999. A CASE FOR function REAL OPTIONS PRICING ANALYSIS TO EVALUATE INFORMATION utilize science PROJECT INVESTMENTS Michel Benaroch Associate professor of Information Systems tutor of Management, siege of Syracuse University Tel: 315-443-3492, Fax: 315-443-5457 Email: mbenaroc@syr.edu Robert J. Kauffman Associate Professor of Information Systems and ratiocination Sciences Carlson School of Management, University of Minnesota 271 19th highroad South Minneapolis, MN 55455 Tel: 612-624-8562, Fax: 612-626-1316 Email: rkauffman@csom.umn.edu ABSTRACT The set of fundamental woof set manakins (OPMs), such(prenominal) as the binomial and the Black-Scholes models, to problems in breeding technology (IT) investment decision making go for been the work of some debate in the last a couple of(prenominal) years. front seek, for example, has made the case that pricing in truthistic options in real world operational and strategic settings offers the potential for useful insights in the evaluation of irreversible investments under uncertainty.

However, most authors in the IS literary productions have made their cases using illustrative, rather than essential real world examples, and have always concluded with caveats and questions for prospective research about the applicability of such methods in practice. This news report makes trey important contributions in this context: (1) it provides a glob hypothetical grounding for the validity of the Black-Scholes option pricing model in the context of the spectrum of capital budgeting methods that might be ! use to esteem IT investments; (2) it shows why the assumptions of both the Black-Scholes and the binomial option pricing models note constraints on the range of IT investment situations that one ass measure out that are similar to those implied by tralatitious capital budgeting methods such as discounted cash flow analysis; and (3) it presents the first application of the Black-Scholes model that uses a real world...If you necessitate to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper