Application Analysis on Real Option Approach to Project Investment
Zhang Wei
Abstract
Zhang Wei
Abstract
Real option approach supplies a framework to measure opportunity value and make investment decision.A general a-pplication framework was put forward based on analysis of real option theory.The framework includes four important parts,which are structuralization,modeling,comparative analysis,and redesign of option.The application framework was applied in electric power industry,based on which it was analyzed the feasibility for the real option approach to do valuation and decision-making of project investment in China.
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Real option approach supplies a framework to measure opportunity value and make investment decision.A general a-pplication framework was put forward based on analysis of real option theory.The framework includes four important parts,which are structuralization,modeling,comparative analysis,and redesign of option.The application framework was applied in electric power industry,based on which it was analyzed the feasibility for the real option approach to do valuation and decision-making of project investment in China.
Key concepts: Valuation (finance), Option value, Investment (military), Valuation of options, Measure (data warehouse), Investment analysis, Risk analysis (engineering), Asian option