The volatility concerning industrial projects is a significant parameter in the analysis of risk in investments. When financial assets are evaluated, the volatility can be determined by historical data of assets. However, when working with industrial projects, usually, there are no historical data, which makes volatility a critical parameter to be determined. The objective of this study is the adoption and comparison of three approaches to determine project volatility in a transformation industry. Two of the adopted approaches, the "Consolidated Volatility Approach of Copeland and Antikarov (2001)" and the "Estimated Volatility of Herath and Park (2002)" were obtained from a literature review of methods for calculation of volatility of investment projects. The third approach is a new proposal for volatility calculation entitled: "The Estimate of Volatility through the Dependence between PVo and PV1". A traditional analysis of investments in an industrial project was performed, in which these three different approaches for determination of volatility were adopted. Lastly, a comparison of the three approaches is presented, in which the difference between the highest and the lowest volatility values is nineteen percentile points.
volatility; risk; real options; investment analysis
