The Use of Multi-State Real Options in Project Evaluation and Project Management

This paper presents the outline of the valuation method of development projects in which there are real option situations. The proposed method takes into account the dependence of the project as a result of two independent random economic factors, which are called state variables. Based on binomial trees, and uses multicriteria dynamic programming. Its use should allow not only to make the right decisions about the project, but also to support decision making during its implementation.