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- Title
Using Real Options Pricing to Value Public R&D Investment in the Deep Seabed Manganese Nodule Project.
- Authors
Hyo-Yeon Choi; Seung-Jun Kwak; Seung-Hoon Yoo
- Abstract
This paper seeks to measure the monetary value of technical development in the deep seabed manganese nodule mining by applying the compound option model (COM). The COM is appropriate for the project in terms of its decision-making structure and embedded uncertainty. The estimation results show that the deep seabed mining project has more economic potential than shown by the previously obtained results from the discounted cash flow (DCF) analysis. In addition, it is reasonable to invest in the project taking the various uncertainty factors into consideration, because the ratio of the value to the cost of the project is far higher than one. This information can be utilized in national ocean policy decision-making.
- Subjects
REAL options (Finance); TECHNOLOGY; MARINE mineral resources
- Publication
Asian Journal of Innovation & Policy, 2016, Vol 5, Issue 2, p197
- ISSN
2287-1608
- Publication type
Article
- DOI
10.7545/ajip.2016.5.2.197