Question

What are some of the factors used in flexibility options,if you are a software design company?

Answer 1

Some of the factors that will be looked into if I am a software design company and I am looking for flexible option are as follows-

A. I will be looking for flexibility in extension of the time of the contract.

B. I will also be looking for flexibility in payments and cash schedule.

C. I will also try to look into the flexibility in terms and condition of delivering the software.

D. the viability of exercising the real options should also be taken on account after determination of flexibility.

E. The ability of option holder should also try to discount with flexibility in the changing macro events and micro events.

flexibility options are generally the real option which will be impacting the performance of the contract.