**5. Conclusions**

Traditional calculation for an uncertain cash flow applies just to the expected values of the cash flow from the project without the possibility of abandoning the project. Given our empirical assumptions, this yields a loss of 1.3 million \$US instead of profit, meaning the project becomes not worthwhile.

Nevertheless, applying the real option analysis, which reveals the value of the option to abandon the second stage running as well, we turn the project to just become profitable and worthwhile. The value of the real option increases depending on the volatility to be either 57.05 million \$US or 59.50 million \$US, depending on future volatility, and the profit is either 7.05 million \$US or 9.48 million \$US, respectively.

Finally, for civil engineering projects with volatility in input and mainly in output prices, it is important to consider the option to abandon the project from the beginning, as this option may turn the project to be profitable.

We underline that, for wind installations, the main volatility is due to energy market prices and less because of wind speed uncertainties, which average out on an annual time scale.

To conclude, we underline that our work contains the following innovative elements, which were not published before:


We thus make the following policy recommendation, which is particularly relevant in the current era of high energy price fluctuations (for example on 15 April 2020, the US WTI Crude was 19.87 US\$, today (20 February 2021) it is 59.24 \$. This is more than 40% difference, which is discussed in the current work). We recommend investors and policy makers to use real options analysis rather than standard discounted cash flow, and take advantage of the ability to abort an unprofitable endeavor.

Future directions in this research area include the analysis of real economic parameters that are not just rough estimates, and the use of more accurate analysis using approaches such as the binomial lattice, the mean reverting jump-diffusion method, and the stochastic volatility model.

**Author Contributions:** Conceptualization, D.G. and A.Y.; methodology, D.G., M.B. and A.Y.; formal analysis, D.G., M.B. and A.Y.; writing—original draft preparation, D.G., M.B. and A.Y.; writing review and editing, D.G., M.B. and A.Y. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** The authors used in this work the information available from the meteorological service of the Israel Ministry of Transport, gathered by the Merom Golan meteorological station [31].

**Conflicts of Interest:** The authors declare no conflict of interest.
