Hi Bill, we've learnt that there are two many methods in regards to projects which I think you are talking about as general flexibility in finance is a very broad topic!

Real Options Analysis - ROA uses models like bespoke simulation and binomial to estimate the vale of the contingent. It is most commonly used when the value of the project depends on the value of another asset (or variable).

Decision Tree Analysis - The simplest method that maps our the different choices that the decision makers have in taking the business. This method looks at the different events that could occur and the decisions required to tackle them, which in turn leads to being able to value flexibility.

I've looked at this from an options pricing perspective. In this there are two factors to look at

- Uncertainty about future projects - The value of the option will increase in line with uncertainty. A firm that has more predictable Cap Ex will value flexibility less than one which is more unpredictability

- Project quality - firms that consistently earn better returns than their expected rate (or "hurdle" rate) will value flexibility more than those who have more "normal" returns