Abstract:<p>In this paper, the evaluation of the investment project in research and development for the innovation and of great impact in the pharmaceutical industry is presented. The project evaluation is done through an American type real call option, based on binomial trees incorporating the expected volatility of the expected cash flows in order to determine the benefit of postponing the project three years, providing flexibility to investors in their decision making. Besides, in the valuation of a real optio… Show more
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