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Quality & Quantity

, Volume 44, Issue 3, pp 509–527 | Cite as

An approach to the R&D value based upon real option method

  • Keng Hsin Lo
  • Yu Wen Lan
Research Note
  • 145 Downloads

Abstract

This paper aims to build up feasible models based upon the real option method (ROM) to assess R&D. In this paper we built eight models integrating with three conditions to assimilate the real situation an R&D project may encounter. We utilized both numerical and statistical illustration based upon an empirical case to exhibit the correctness of our models. We diverged our discussion into either expense or capital viewpoint to react with current accounting debate. The results shed us the light: our models in both expense and capital viewpoint can correctly asses R&D; the selected conditions play essential roles to influence the correctness of our models.

Keywords

R&D Real option method Expense Capital 

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Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  1. 1.Department of Business AdministrationNational Central UniversityJhongli CityTaiwan, ROC

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