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What is Abandonment Option Valuation Techniques about?

This document presents an analysis of pricing an abandonment option for a project. It shows the market data including expected market return, sigma of market return, and risk-free rate. It then calculates the one-period "up" and "down" of the market. The project cash flows are presented along with state-dependent present value factors. The net present value is calculated both with and without including the abandonment option.

Author

Syed Ameer Ali Shah

Language

EN