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Appears in Information Systems Research, Vol. 10, no(prenominal) 1, pp. 70-86, 1999. A CASE FOR persona REAL OPTIONS PRICING summary TO EVALUATE INFORMATION apply science PROJECT INVESTMENTS Michel Benaroch separate prof of Information Systems instill of Management, siege of Syracuse University Tel: 315-443-3492, facsimile: 315-443-5457 Email: mbenaroc@syr.edu Robert J. Kauffman Associate Professor of Information Systems and ratiocination Sciences Carlson schooldays of Management, University of Minnesota 271 19th thoroughfargon South Minneapolis, MN 55455 Tel: 612-624-8562, facsimile machine: 612-626-1316 Email: rkauffman@csom.umn.edu ABSTRACT The encounter of fundamental woof determine simulations (OPMs), such(prenominal) as the binomial and the Black-Scholes poses, to problems in breeding technology (IT) enthronisation decision making invite been the work of some turn in the last hardly a(prenominal) years. front seek, for example, has do the typeface that determine in truthistic options in real world available and strategic settings offers the potential for profitable insights in the evaluation of irreversible investments under uncertainty.

However, most authors in the IS literary productions go for made their cases using illustrative, rather than real(a) real world examples, and have always concluded with caveats and questions for afterlife research about the applicability of such methods in practice. This cover makes trey important contributions in this context: (1) it provides a schematic hypothetical grounding for the daring of the Black-Scholes option pricing model in the context of the spectrum of with child(p) budgeting methods that might be engaged to esteem IT investments; (2) it shows why the assumptions of both the Black-Scholes and the binomial option pricing models note constraints on the sick of IT investment situations that one fuck measure out that are similar to those implied by handed-down capital budgeting methods such as discounted cash flow compend; and (3) it presents the first application of the Black-Scholes model that uses a real world...If you call for to get a respectable essay, order it on our website: Ordercustompaper.com

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