| The application of NPV, Decision Trees, and Real Options in real asset management has been debated in academia and practiced in industry during the last 10 years. Many researchers advocate Real Options over NPV and Decision Trees in project management. Some researches propose the integration of Real Options and NPV in real asset valuation. However, the comparable advantage and limitations of the three methods in technology development and adoption evaluation have not been addressed. This research, therefore, studies the feasibility, advantage, and discrepancies, of each method in technology investment evaluation at various innovation phases.; The research findings of this study are built on its novel research methods. Four criteria, coping with uncertainty, adaptability, information cost, and overall utility are developed to measure the application values of the methods. In addition, two technology phases, the start-up phase and the maturity phase, are defined as the market competition settings for the technology investment projects. With interviews providing insightful explanations for the statistical analysis of the survey data, the methodological triangulation strengthens the research validity and reliability. Lastly, Repeated Measure ANOVA is applied to screen out the differences among the technology innovation investment experiences of the surveyed subjects. As a result, the comparative advantage and disadvantage of each method in technology investment evaluations is studied with the survey data. Some research findings include the following:; Real Options and Decision Trees are superior to NPV in coping with uncertainties and their advantages are more significant at the start-up phase and better reflected in sequential technology investments and product portfolio. The application values of Decision Tree and Real Options in risk management are leveraged by the firm's learning ability.; In addition, the research finds the applications of all the three methods require higher information cost at the start-up phase than at the maturity stage. At the maturity phase, Real Option application requires higher information cost than the other two, which suggests the application of Real Options is most difficult.; Last but not least, the standard deviation for the application values of Real Options is the highest among the three methods suggesting Real Options' application in technology investment is most controversial. |
