The Real Options Valuation model encompasses a suite of option pricing tools to quantify the embedded strategic value for a range of financial analysis and investment scenarios. Traditional discounted cash flow investment analysis will only accept an investment if the returns on the project exceed the hurdle rate. While this is a worthwhile exercise, it fails to consider the myriad of strategic options that are associated with many investments. This model provides the ability to identify what options might exist in your proposal and the tools to estimate the quantification of them. The key features of this model include:
Ease and flexibility of input, with embedded help prompts.
Informative 'Quick Start' menu for choosing the correct tool for the situation.
Modified Black Scholes options model to value the options to delay, expand, or abandon investments.
Automatic binomial 'tree' builder model to evaluate complex strategic options with multiple stages.
Nash equilibrium Game Theory model to evaluate market entry strategies in a competitive environment.
Ability to predefine historical investment and/or industry risk profiles to utilize across real options models.
Compatible with all versions of Excel for Windows as well as Excel for Mac 2011 and 2004 as a cross platform analytical business solution.
More resources for the Real Option Valuation model including video, user manual and support can be found on the Excel Real Option Valuation Template page.
Reviewed by Candlemaker on The real options valuation is very impressive work with Excel. It is very much like high dollar software but can be used with the already installed Microsoft Excel.
Reviewed by Tech Finance Manager on We used this spreadsheet to justify a $30M software spend to a large professional services company. Specifically, we showed them the value of future expansion options if they went ahead with the said investment. This step was critical to closing the deal. I would highly recommend the Real Option Valuation spreadsheet to all financially savvy salespeople out there!
Reviewed by TigerW11 on I am blown away about how much this product has helped me to expand my knowledge of the market. The spreadsheet enables me, as a business professional, to go deeper than the numbers involved in market valuation by giving each product it's own name, description and scenario analysis complete with various outcomes. Wonderful product for option valuation.
Reviewed by Camshaft on This tool will and has brought new insight into my organisation at very minimal cost. Worth every cent spent and the ROI will occur the moment to complete the document. Truely a cost effective tool.
Reviewed by Alpha on When I was asked by my boss to make a real option valuation report, all I thought was "What is Real Option Valuation in the first place?". Then you guys came to my rescue with your template. Upon submission, I was asked "So how was it?". I quipped, "It was a breeze!". Thank you.
Reviewed by Irma Arce on I was able to configure this template to apply it in the assessment of prospective investments and assessing uncertainty around projects.
Reviewed by Jason on The Real Option Valuation template has aided me in pricing options for my own investment purposes.
