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MIT engineering economics
·
Module 11
Advanced Topics: Inflation and Real Options
Actual vs. Real Dollars
Distinguish between actual dollars (A$) and real dollars (R$).
Real vs. Nominal Cash Flows: The Impact of Inflation
Convert cash flows between actual and real dollars using an inflation rate.
3
Project Evaluation with Real vs. Actual Dollars
Perform project evaluations using either real or actual dollars consistently.
4
Understanding Real Options in Tech Projects
Define a real option and identify common types in technology projects (e.g., option to defer, expand, abandon).
5
Decision Tree Analysis for Real Options
Use decision tree analysis to model and evaluate a project that includes a real option.
6
Beyond NPV: Valuing Strategic Flexibility with Real Options
Explain how real options analysis can capture strategic value missed by traditional NPV.
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Probabilistic Analysis and Decision Trees
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Course Capstone and Review