Universitá Degli Studi -l'aquila Facoltá Di Economia Dip. Di Sistemi Ed Istituzioni per L'economia a Cvp Analysis with Irreversible and Recurrent Real Options. * Contents

In this short paper, (Kulatilaka, 1988) model of FMS management is reinterpreted as a real options dynamic programming (DP) version of traditional Cost Volume Profit (CVP) analysis. Numerical examples replicate results reported in chapter 4 example 1.H. and chapter 7 of (Dixit and Pindyck, 1994). Moreover, a different version of (Kulatilaka, 1988) numerical… (More)