Publication
Reflection on the CEMS business project and real options in the context of embraer compósitos
| Summary: | This Work Project is divided into two major parts. I start by providing my individual reflection on the CEMS Business Project developed this semester, which focused on answering the question “what manufacturing technologies does Embraer Compósitos have to develop within the next 8 years and how should they be implemented” (section A). I will then perform a new analysis, relating my Business Project with my masters in finance, developing an intuitive framework for Embraer Compósitos to value manufacturing technologies with imbedded real options to abandon (section B). First, I explain why implementing technologies with a pilot phase creates a real option to abandon the project. I then present a binomial framework to value such option and show that incorporating the option valuation into the financial assessment increases the technology value not only by limiting potential losses but also by decreasing the overall risk of the project. |
|---|---|
| Main Authors: | Sousa, Nuno dos Santos Cochito Lopes de |
| Subject: | Technology roadmap Embraer compósitos Real options Binomial valuation |
| Year: | 2015 |
| Country: | Portugal |
| Document type: | master thesis |
| Access type: | open access |
| Associated institution: | Universidade Nova de Lisboa |
| Language: | English |
| Origin: | Repositório Institucional da UNL |
| Summary: | This Work Project is divided into two major parts. I start by providing my individual reflection on the CEMS Business Project developed this semester, which focused on answering the question “what manufacturing technologies does Embraer Compósitos have to develop within the next 8 years and how should they be implemented” (section A). I will then perform a new analysis, relating my Business Project with my masters in finance, developing an intuitive framework for Embraer Compósitos to value manufacturing technologies with imbedded real options to abandon (section B). First, I explain why implementing technologies with a pilot phase creates a real option to abandon the project. I then present a binomial framework to value such option and show that incorporating the option valuation into the financial assessment increases the technology value not only by limiting potential losses but also by decreasing the overall risk of the project. |
|---|