ecent developments in investment analysis and their relevancy in agricultural investment assessment are discussed in this article. The Net Present Value model can be modified to incorporate the value of strategic management of an investment into the initial evaluation of that investment. Since these decisions can be modelled as call and put options, the mathematics of financial options has been applied to these investment decisions, and referred to as real options analysis. It is shown how contingent claims analysis can be used to value these real options. Many net returns in agricultural activities are correlated with prices of underlying agricultural commodities, suggesting the potential use of contingent claims analysis.