English

Summary of design resultsfrom different perspectivesPerspective Simulation Option Embedded Design Estimated Expected NPVDeterministic No No 6 levels $6,238,416Recognizing Uncertainty Yes No 5 levels $3,536,474Incorporating Flexibilty Yes Yes4 levels with strengthenedstructure$10,517,140Why is the optimal design much betterwhen we design with flexibility?Garage Case, etc de Neufville, Scholtes and Wang Slide 19 of 23Sources of value for flexibility:1) Minimize exposure to downside riskProbability10.90.80.70.60.50.40.30.20.10-20 -15 -10 -5 0 5 105-Floor Design4-Floor DesignGarage Case, etc de Neufville, Scholtes and Wang Slide 20 of 2310