Although well-known, methods for valuing projects in the face of uncertainty, such as decision trees, do not seem to have been widely adopted by industry. This is despite widespread academic confidence that they should produce more realistic financial valuation of projects than naive use of discounted cash flow (DCF) techniques. An obvious question is why these tools have not been more widely adopted. In this paper we propose one reason for this. We argue that the ambiguity (i.e. the uncertainty about the uncertainties) in most technology valuations prevents significant increases in confidence in the financial valuations produced by techniques more sophisticated than DCF, although there may well be better understanding of the underlying issues. We illustrate this argument by considering the uncertainties in a technology development at an SME. We then reflect on the role of financial valuations at the early stage in technology projects, suggesting that they are to help create a credible story rather than provide definitive figures. We then suggest some avenues of further research. First of all, however, we review the literature on uncertainty and ambiguity, and on valuation of technology projects in the face of these challenges.
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