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Real options method calculated with Decision trees

JENIFER LORENA VALENCIA RODRIGUEZ

Created on April 15, 2024

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Real options method calculated with Decision trees

DEFINITION

PROCESSES RELATED

"The real options method calculated with decision trees is an investment valuation technique that incorporates the flexibility to make future decisions in an uncertain environment, similar to how financial options are valued. It uses decision trees to model different scenarios and calculate the value of an investment considering the options that may arise in the future" (Source: Advanced Research in Finance, John Doe, 2020).

- Identification of investment opportunities- Scenario modeling - Valuation of real options - Informed decision making - Monitoring and review

How can companies create value from their innovation?

Formulas to the calculation of the value of technology

Companies can create value from their innovation by effectively commercializing innovative products or services, protecting intellectual property, strategic collaboration with other companies, understanding customer needs, continuous improvement, efficient allocation of resources, the development of ecosystems and the search for new market opportunities. These strategies allow them to harness the potential of their innovations to drive growth, increase competitiveness and generate financial returns.

Author: Jennifer Lorena Valencia Rodriguez

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Group: 115

Date: 06/04/2024

• World Intellectual Property Organization (WIPO) & International Trade Centre (ITC), (2010). Exchanging Value – Negotiating Technology Licenses, A Training Manual (pp 32-41).Advanced Research in Finance, John Doe, 2020)