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Innovative Methods Of Project Investment Value Analysis Study

Posted on:2003-07-09Degree:DoctorType:Dissertation
Country:ChinaCandidate:L ChenFull Text:PDF
GTID:1116360092470984Subject:Accounting
Abstract/Summary:PDF Full Text Request
As the world moving from the industry economies ages towards the knowledge-based economy ages, all enterprises are face to face with more complex environment and more intense competition. One of the important characteristics is namely uncertainty. So-called" plan always can not catch up with change" means that too much uncertainty and too hard to anticipate make enterprises be not able to manage future direction easily and directors have no peace of mind day and night. For this reason enterprises usually consider that uncertainty should be kept away by all means, relate uncertainty to loss directly and recognize it latently threaten the realization of business strategy and the maximum of firm value. All above reflects only one aspect of the effects of uncertainty, a double blade sword. In fact, uncertainty not only relates with loss but with gain. Enterprises usually exaggerate the passive effect brought from uncertainty and neglect its positive effect. In fact, if making full use of uncertainty, enterprises can avoid disadvantageous effects one hand, and grasp possible opportunity on the other hand.In the investment valuation realm, uncertainty play as a double blade sword role, which is the outset of this dissertation. This paper, maybe somewhat focuses on its advantageous effects, emphasizes that uncertainty creates value and establishes foundation to realize its business strategy and to maximize firm value.This paper bases on the traditional investment valuation technique, that is discounted cash flow method, adopts the normative research method, combines case example analysis, synthesizes induction, deduction, reasoning and compare means. Study topics are as below: the origin of the creative valuation analysis method, the valuation framework construction and the relationship between value analysis and all related aspects with strategy realization. The following points are approved:First, the project investment is a portfolio of the cash flow and option;Second, real option analysis principle is beneficial to the formation to the complete value recognition, option value must not be omitted;Third, both traditional discounted cash flow method and real option analysis are necessary to acquire complete project investment value, and with each other for complement; Fourth, complete cognition of investment the value will consumedly strengthen the enterprise's ability to realize its strategy. Structure of the dissertation is arranged as below: As a beginning, The first chapter aims at a twofold goal: put forward the issue to be studied anddefine the scope of study. The first three sections bring forth the issue that is the investment valuation methods, from three different sides respectively, which include environment asking for innovation, valuation methods evolution and in-and-out related standpoints. Section 4 then defines the scope of this study and keeps from three issues from this paper, which include whole enterprise evaluation, financial asset pricing and agency matter.The next two chapters are key parts of this study and in principle demonstrate the above first three standpoints from different angles. And chapter 4 and 5 demonstrate from the applied level. Specificly, chapter 2 begins with the impact of uncertainty on project value, emphasizes that DCF method should be complemented and it's necessary to find a renewed technique which reflects project value more exactly. Chapter 3 discusses the option character of project investment, studies the general components of project value, and elicits the following standpoints, that is project investment is a portfolio of cash flow and option. After establishing the real option analysis concept, this chapter adopts comparison means and gets some beneficial points, respectively to discuss the similarities and differences between real option and financial option, real option analysis method and discounted cash flow method. Based on all above, section 5 analyzes three different kinds of real option analysis framework, synthesizes their essence...
Keywords/Search Tags:Project Investment Value, Real Option Analysis, Operating(Managerial) Flexibility, Strategic Value, Discounted Cash Flow Method, Net Present Value
PDF Full Text Request
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