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Strategic construction mechatronics valuation: A real option-pricing approach.

Taylor, Mark D and Wamuziri, Sam (2002) Strategic construction mechatronics valuation: A real option-pricing approach. Journal of Financial Management of Property and Construction, 7 (2). 75 - 90. ISSN 1366-4387

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    Abstract/Description

    This paper presents the application of real option-pricing theory to the appraisal of advanced construction technology (ACT) investment opportunities. Discounted cash flow appraisal techniques alone do not take into account managerial investment flexibility and neglect timing, abandonment, process switching and sequential strategic growth options. Timing and strategic growth options are valued for hypothetical investment opportunities. Valuable insight into the intrinsic value of investment deferral, optimal expenditure timing and sequential investment opportunities is presented. Real optio-pricing analysis provides a technique for amalgamating strategic planning with investment appraisal. The presented methodology does not replace the need for managerial judgement, but may assist technology strategy decision making within construction organisations. Furthermore, the strategic value of construction automation investment may appear more advantageous when appraised using real option-pricing theory.

    Item Type: Article
    Print ISSN: 1366-4387
    Electronic ISSN: 1759-8443
    Uncontrolled Keywords: Advanced construction technology; Construction mechatronics; Real option-pricing; Strategic valuation; Review;
    University Divisions/Research Centres: Faculty of Engineering, Computing and Creative Industries > School of Engineering and the Built Environment
    Dewey Decimal Subjects: 600 Technology > 690 Building & construction > 692 Auxiliary construction practices
    000 Computer science, information & general works > 000 Computer science, knowledge & systems > 005 Computer programming, programs & data
    600 Technology > 650 Management & public relations > 658 General management
    Library of Congress Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
    T Technology > TH Building construction
    Q Science > QA Mathematics > QA76 Computer software
    Item ID: 2022
    Depositing User: RAE Import
    Date Deposited: 23 Apr 2008 14:27
    Last Modified: 17 Jun 2013 12:00
    URI: http://researchrepository.napier.ac.uk/id/eprint/2022

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