Week 3 [Kogut, 1991]

Question 1

How can you calculate the Value of venture?

[Kogut, 1991]

Answer 1

Value of venture = Fvalue of assents in use + Ovalue of future growth opportunities

Question 2

What two (2) options does [Kogut, 1991] consider for a firm?
 [Kogut, 1991]

Answer 2

1. Waiting to invest, it pays to wait before committing resources
2. Option of expanding production, investment commitment is necessary in order to have the right to expand in the future
   “JV services as a way to bridge these options through pooling resources of two or more firms”