Abstract
The idea of real option is applied in military software pricing in this paper. By redefinition and combination of the two typical option pricing models (Black-Scholes model and binomial tree model), we find out that option value of military software is estimated software cost. Since the crucial variable of Black-Scholes model is the volatility whose value can be estimated with the method of Monte Carlo analogy. At last, the application of this military software pricing model is demonstrated in a real case.
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