Finance & Banking · Corporate Finance

Real Options Lab — Why Optionality Matters in Capital Allocation

MBA-band capstone for Track 3G (Formal Decision Analysis).

3 rounds Executive English, Español

Preview

About this simulation

MBA-band capstone for Track 3G (Formal Decision Analysis). Play CPO Pia Marjanovic at CoEditor.io and defend a USD 60M staged R&D bet against a Hannes-grade NPV-only abandonment memo across three rounds: diagnose the NPV frame, design a triangulated option-pricing valuation, and defend the recommendation to the Board with pre-committed Gate 3 abandonment tripwires.

Who it is for

An advanced simulation for participants used to working with the main frameworks and trade-offs of the subject, designed for executive education and experienced professionals.

How a session runs

  1. The instructor creates a session from the Eureka dashboard and invites the participants.
  2. Participants play 3 rounds. In each one they submit their decisions and the simulation calculates the results.
  3. The simulation can be run in English, Español.
  4. The instructor follows each participant's progress and results from the dashboard, and uses the class results for the debrief.

Decisions participants make

The decisions participants make during the simulation:

  • Diagnostic frame to take into Hannes office
  • Option types you will name (Trigeorgis taxonomy, 1-7)
  • Treatment of the USD 14M Gate 1 spend
  • Independent sources used to triangulate sigma (1-3)
  • Volatility sigma (annualised, %)
  • Valuation method
  • Run sensitivity bands at sigma=0.40 / 0.50 / 0.60 and V0 floor cases
  • Pre-committed Gate 3 abandonment tripwires (0-5)
  • Defence posture in front of the Board
  • Volunteer the slide titled What would make us abandon at Gate 3

Subjects covered

Designed for courses in Corporate Finance.

Ready to use Real Options Lab — Why Optionality Matters in Capital Allocation with your students?

Contact us and we'll set you up with a free trial session.

Contact us