The Value Evaluation Research Of Waste Incineration Power Generation Projects Based On Option Two Binomial Tree Model

With the improvement of living standards, the growth rate of living garbage is more and more fast. It is a worldwide topic that how to deal with the garbage. Along with the concept of environmental protection and resource recycling, technology constantly updated progress, Garbage is a new energy resource. The construction of Garbage power plant created quite a stir in 2012 in China. Garbage power generation project investment cost is large, high operational risk, technology development, market competition is intense, It is important to reasonably determine the project economic value, for the large investment cost, high operational risk, difficult Technology development and fierce market competition of the project. In order to reduce investment risk, considering project investment management flexibility and strategic development, this project use the multi-stage investment strategy. Traditional evaluation method ignores the strategic value of the project investment, so looking for a new project valuation method has direct guidance and reference significance to active garbage incineration power generation project of capital operation and market investment.Under the precondition of value management, this article will introduce the option two binomial tree model of waste incineration power generation project evaluation, for the value of the waste incineration power generation project assessment provides a set of value evaluation model can be drawn lessons from. First, use the utility theory and management theory to show the value structure of waste incineration power generation project and methods of evaluation to bring in the real option. Through analyze features of the project to prove that it is of the nature of real options. Then use the tree model and net cash flow model to seek a new way which is suitable for assess the value of the project. Finally, with the case analysis, according to the characteristics of the Hengyang waste incineration power generation project to create a timing option new two binomial tree model which use to calculate the project value. Through compare the different value to choose the best time to invest and analyze the final value.Project investment evaluation not only consider the economic value, but also include the management value with the expansion, contraction, discard and choice value. This paper put the ideas of options to waste incineration power generation projects which would add traditional value of the project by choosing the invest time to create the strategic management value. That will provides a new way and operational method to the similar project investment. Also has reference significance for other project investment.