Using decision analysis to value R&D projects
Project portfolio management, the equivalent of financial portfolio management but focused on R&D projects rather than financial assets, often relies on decision analysis methods to value projects rather than traditional financial valuation methods such as net present value (NPV). In finance, th...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2009
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| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/6772 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7769/viewcontent/BloomsburyPubli_2014_UsingDecisionAnalysis_QFINANCETheUltimateRe__1_.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Project portfolio management, the equivalent of financial portfolio management but focused on R&D projects rather than financial assets, often relies on decision analysis methods to value projects rather than traditional financial valuation methods such as net present value (NPV). In finance, the idea of managing portfolios of assets goes back a long time, with the first formal methods being developed in the 1950s. Simply put, assembling a portfolio of stocks, bonds, and other financial instruments balances the risk a manager is taking with any one of the investments. Over time, this same idea has also taken hold for managing a portfolio of R&D projects, where it is referred to as project portfolio management. |
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