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The valuation of information technology (IT) investments is particularly challenging because it is characterized by long payback periods, uncertainty, and changing business conditions. Corporate budgeting methods use accounting-based criteria like return on investment (ROI), internal rate of return (IRR), and payback period which were designed for projects with no option features. However, the uncertainties underlying IT investment decisions and the inability of traditional DCF methods to incorporate the impact of flexibility on project valuation force executives to rely on gut instinct when finalizing IT investment decisions. As corporations struggle with these issues, the valuation and prioritization of IT projects raises several challenges. In a survey of senior IT executives from 50 large firms with significant business-to-business experience, conducted by Forrester Research [11], respondents mentioned that they often struggled to prioritize project funding requests and lacked a method to coordinate funding decisions across their organizations.