ABSTRACT
Long-term investment projects play a significant role in modern economy. Development of a new enterprise is a typical example of such a project. A company that plans an investment of this type is often not obliged to realize the project. In this sense, such investment activities are similar to a call option on a financial asset. In both cases an investor has the right to gain some outcomes of a project in return for invested capital (e.g., buy shares at a strike price). Such investment programs in “real economy” are referred to as real options.
