How to Value Energy Assets Using Real Options.

The article offers information on real-option valuation method and discusses how the technique can efficiently value capital asset projects. Real-option valuation technique trusts on the discounted cash flow (DCF) method and does not alter the DCF computations. The DCF techniques offer a very significant result which is the anticipated value of the project. Real-option approach is generally regarded as an extension of financial option theory used in investment options on real assets.