Appraising Value and Risk of Commercial Assets: Stratifying the Modified Internal Rate of Return in an American and European Put Option Analysis

Authors

  • Steven Lifland High Point University

Keywords:

Finance, asset valuation, put option, commercial assets, rate of return

Abstract

In comparative project valuations, there is an assumption of equality of risk across investments. Two commercial metro office buildlings are valued according to both a European and American Put Option, broadening the number of acceptable actions for investors. This paper presents a technique that enhances the final investment decision process. Specifically, this paper posits that, superior to the Internal Rate of Return (IRR), stratifying the Modifited Internal Rate of Return (MIRR) provides another layer of risk analysis thta facilitates project comparisons even where other techniques have led to conflicting results.

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Published

2010-12-13

Issue

Vol. 1 No. 1 (2010)

Section

ABR Journal Articles

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