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Valuation Of Hi-tech Business Project With Real Option

Posted on:2003-02-09Degree:MasterType:Thesis
Country:ChinaCandidate:R ZhaoFull Text:PDF
GTID:2156360062476382Subject:Technical Economics and Management
Abstract/Summary:PDF Full Text Request
The valuation of hi-tech business project with real option is referred. Some conclusions of real option are tested (for example, uncertainty increases the value of the project) and the differences of decision result between the DCF and real option are compared The historical and current situation of study on real option is reviewed systemically first. On the base of these, the conditions on which real option has value are concluded ;the investment project is re-studied with real option theory, such as the types of project and the consist of value :the steps and methods of the valuation using real option are summarized and frame of analysis with real option is provided . Secondly, basic model of one-stage investment decision is provided and the effects of the parameters, including the capacity step, time step etc on the simulation are understood At the same time, the algorithm (monte carlo method) of basic model is given and the basic model is studied in order to find how the three parameters of demand affect the investment decisions. Finally, the basic model is expanded considering the concrete characteristics of hi-tech project, which makes the meaning of the expanded model much larger. The algorithm of the expanded model is offered with progranming. At last the three possible decisions are simulated and analyzed through which it is found that different set of initial demand change of demand and project stage means different decisioa...
Keywords/Search Tags:hi-tech business project, investment decision, real option, discounted cash flow method
PDF Full Text Request
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