Option to redeploy

An option to redeploy lets management redirect an asset, facility or project to a more valuable use when circumstances change. Some switching options concern inputs or outputs; others involve moving equipment or capacity between activities. The benefit is the value of the best feasible alternative less the costs and consequences of changing use. It depends on actual technical capacity, contractual rights, timing and market demand. A real-options valuation should not count flexibility again if the underlying forecast already includes the same conditional switch.