Spreadsheet TOM 2025 (solved).xlsx

	B	C	D	E	F	H	I	J	K	L	M	N	O	P	R	S	T	U	V	W	X	Y	Z	AB	AC	AD	AE	AF	AG	AH	AI	AJ	AL	AM	AN	AO	AP	AQ	AR	AS
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6																																	Ci	Net return in business i in a particular time (index for time omitted)
7																																	Cj	Net return in business j in a particular time (index for time omitted)
8																														n
9																														1	2	3	l = 1	The firm continues to have both businesses, i and j
10																										Ci	10	l	1	26.00			l = 2	The firm uses the switching option and redeploys all resources from business j to business i
11																								pu	0.5				2	18.00	20.00		l = 3	The firm uses the abandonment option and divests business j
12																										Cj	16		3	19.00		10.00
13																					n												n = 1	The firm continued to have both businesses, i and j
14																					1	2	3										n = 2	The firm used the switching option and redeployed all resources from business j to business i
15																	Ci	10	l	1	48.00												n = 3	The firm used the abandonment option and divested business j
16															pu	0.5				2	38.00	40.00
17																	Cj	14		3	38.00		20.00										S	2	Total switching cost
18												n																		n			γ	0.1	Marginal abandonment cost
19												1	2	3																1	2	3	r	0	Risk-free interest rate for discounting over time
20								Ci	10	l	1	66.25												pd	0.5	Ci	10	l	1	22.00			n	1	Initial condition: the firm enters the model having been in both businesses, i and j
21						pu	0.5				2	58.00	60.00																2	18.00	20.00
22								Cj	12		3	57.00		30.00										pu	0.5	Cj	12		3	19.00		10.00
23					n																n																		0.0000
24					1																1	2	3																0.0000
25	Ci	10	l	1	82.13										pd	0.5	Ci	10	l	1	40.50																	0.0000
26				2	78.00															2	38.00	40.00																0.0000
27	Cj	10		3	76.00										pu	0.5	Cj	10		3	38.00		20.00														0.0000		0.0000
28												n																		n							0.0000		0.0000
29												1	2	3																1	2	3				0.0000		0.0000
30								Ci	10	l	1	57.25												pd	0.5	Ci	10	l	1	18.00						0.0000		0.0000
31						pd	0.5				2	58.00	60.00																2	18.00	20.00						0.5000		0.0000
32								Cj	8		3	57.00		30.00										pu	0.5	Cj	8		3	19.00		10.00					0.0000		0.1250
33																					n																	0.0000
34																					1	2	3															0.0000
35																	Ci	10	l	1	35.00																		0.0000
36															pd	0.5				2	38.00	40.00																	0.0000
37																	Cj	6		3	38.00		20.00
38																														n						0.0000	0.5000	0.0000	0.0000	0.5000
39																														1	2	3				0.0000	0.0000	0.0000	0.1250	0.1250
40																										Ci	10	l	1	14.00
41																								pd	0.5				2	18.00	20.00
42																										Cj	4		3	19.00		10.00
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