ELI5: Explain Like I'm 5

Real options valuation

Real options valuation is a way to figure out how much something is worth. It works by looking at how much money you can expect to make from an investment option. To do this, you look at things like the potential future payoff of the investment, what risks are associated with the investment, and the cost of the investment. Real options valuation is often used by businesses when they're deciding if they should invest in something or not.