BusinessReal Option
A SelectSmart.com Flowchart by pradeepm
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Steps in real option

                 
 
Cash flow: Investment, -I
First movie a success?
YES
Produce second movie
Cash Flow: Revenue, 0.7*R


NO







Produce both movies at same time?
 
Cash flow: Revenue, R
Cash Flow: Investment, -1.2*I
 


YES







 
Cash flow: Investment, < 2I
Cash Flow: Revenue, < 2R