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Contribution Details

Type Master's Thesis
Scope Discipline-based scholarship
Title Real-Option Valuation of a Capital-Investment Project in Sustainable Aviation Fuel Production
Organization Unit
Authors
  • Katariina Reinikainen
Supervisors
  • Marc Chesney
Language
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Date 2023
Abstract Text To curb CO2 emissions to limit the effects of climate change, a global shift towards the uptake of Sustainable Aviation Fuels (SAF) is needed. The literature review summarizes the status quo in the production of SAF. In the experimental part, a capital investment project for pro-duction of SAF is valued as a real option (RO), and RO value is contrasted with Net Present Value (NPV). Several cost and cash flow cases are calculated, with several combinations of parameters in the option model. The results show that project is unprofitable, but the RO value behaves as predicted by the theory.
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