Options and Real OptionsOptions and Real Options model consists of an Excel model which presents a valuation framework calculation for options. The calculations can be applied to both call options and put options, split into European and American options. The Black and Scholes method is used for the valuation of the European options, while the binomial method is used for the valuation of the American options. So, a quick overview of the model, in the contents tab you can see

The model is intended to be used in a specific calendar year and allow the user to enter actual data for prices

cash flows

the user fills in the yellow cells the monthly rent (or other income from the property)

In the summary tab you will be able to compare the Valuation per share from each method and benchmark it to the market price at the time and the analyst consensus

Sunk costs are costs that have already been incurred and are not considered in the capital budgeting process

The user needs to set the loan amount

Based on the historical financial statements tab and on the driver’s tab

- Payables

surplus and deficit of the government etc

construction schedule for the investment in terms of percentage completion and investment amounts per cost type

the tool will use you input data to create accurate forecasts for your future financial performance and in the valuation tab it will enable you the perform a DCF analysis and determine the value of your company based on the created 3 statement model

Operational Costs: Breakdown of costs including labor