caa a22 4500 388047542 CHVBK 20180307125042.0 cr unu---uuuuu 161130e199809 xx s 000 0 eng 10.2307/2331098 doi S002210900000096X pii (NATIONALLICENCE)cambridge-10.2307/2331098 Capital Budgeting for Interrelated Projects: A Real Options Approach [Elektronische Daten] This paper explores the effect of project interrelationships on investment decisions and project values in a real options framework. We examine in detail the mutually exclusive case where a firm may invest in the development stage of two projects and then may select only a single project to implement. The firm can develop the projects in parallel or in sequence. The choice of development policy depends on the relative values of the embedded options for each strategy. Sequential development is shown to be superior to parallel development when projects have highly correlated values, and when they require a large commitment of capital for development, are short term in nature, and have relatively low volatility. We also show that the optimal ordering of sequential projects does not always begin with the most profitable project. Copyright © School of Business Administration, University of Washington 1998 Childs Paul D. University of Kentucky, Gatton College of Business and Economics, Lexington, KY 40506 Ott Steven H. University of Kentucky, Gatton College of Business and Economics, Lexington, KY 40506 Triantis Alexander J. University of Maryland at College Park, College of Business and Management, Van Munching Hall, College Park, MD 20742. Journal of Financial and Quantitative Analysis Cambridge University Press 33/3(1998-09), 305-334 0022-1090 33:3<305 1998 33 JFQ https://doi.org/10.2307/2331098 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.2307/2331098 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Childs Paul D. University of Kentucky, Gatton College of Business and Economics, Lexington, KY 40506 NATIONALLICENCE 700 1- Ott Steven H. University of Kentucky, Gatton College of Business and Economics, Lexington, KY 40506 NATIONALLICENCE 700 1- Triantis Alexander J. University of Maryland at College Park, College of Business and Management, Van Munching Hall, College Park, MD 20742 NATIONALLICENCE 773 0- Journal of Financial and Quantitative Analysis Cambridge University Press 33/3(1998-09), 305-334 0022-1090 33:3<305 1998 33 JFQ CC0 http://creativecommons.org/publicdomain/zero/1.0 nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-cambridge