Study On Analysis Method Of Project Investment Value Based On Real Option

The project investment value analysis plays an important role in the investment decision. Studies on the investment value analysis benefit enterprises to enhance the accuracy and sensibility of their making decisions.First, the paper analyzes the reason for creating the method of the project investment value analysis and its history , comments the impact of the uncertainty on the traditionalinvestment decision method-discounted cash flow (DCF) , analyzes the advantages, thedisadvantages and the limitations of DCF. In the case of uncertainty, the project investment can also bring the extra value ,which is formed by the managerial flexibility and strategic value , besides bringing cash flow.Second, it analyzes the dissymmetry of the project value distribution and dissymmetry of right and obligation, clarifies the internal character of the real option of a project, contrasts it with the financial option, and demonstrates the composition of project value from different angles On the basis of the above, the paper puts forward the viewpoints that the project investment is a portfolio of the cash flow and the option ,construct a decision tactics based on real option, then, argues about the three present frames of the real option analysis, and puts forward a complete analysis frame.Finally, it illustrates the application of the frame by the use of a case study.