The Application of ROA in the Evaluation of Software Updating Options
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Abstract
This paper provides a basic comparison between the NPV method and ROA method. As a result, deficiencies with NPV method in the evaluation of uncertain and irreversible and time choice featured projects are exposed, and a replacement of NPV with ROA is suggested. This article also provides several models of calculating real options. and the value of software updating option is calculated through Dynamic Programming.
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