2003•煤炭学报：英文版Requires access
The application of option pricing theory to the evaluation of mining investment
Zhang Neng
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Abstract
A rational evaluation on an investment project forms the basis of a right investment decision making. The discounted cash flow (DCF for short) method is usually used as a traditional evaluation method for a project investment. However, as the mining investment is influenced by many uncertainties, DCF method cannot take into account these uncertainties and often underestimates the value of an investment project. Based on the option pricing theory of the modern financial assets, the characteristics of a real project investment are discussed, and the management option of mine managers and its pricing method are described.