Research Of Investment Decisions On The Large Shipbuilding Facility Based On The Real Option Theory

Large shipbuilding facility is one of necessary facilities to build and repair the ship. So shipbuilding enterprises has always faced a investment decision-making problem of large shipbuilding facility. As a fixed asset investment of the shipbuilding enterprises, It accounts for higher percentages of investment cost, and it is one of the main factors which has a influence to the shipbuilding investment decision-making in the shipbuilding enterprises. And it is the prerequisite of shipbuilding enterprises'existence. The investment of Large shipbuilding facility has its own special characterizes other than other kind of investment, such as massive investment; long period for investment; many managerial flexibilities and so on. All these make it difficult to solve the problem of Large shipbuilding facility investment with traditional investment decision method. As concerned as that,it is necessary to find a more suited and effective method to make Large shipbuilding facility investment decision. The paper adopts real option method to study the large shipbuilding facility investment decision.(1)The paper introduced 8 real option types including waiting option, mounting option, growth option, abandon option, subsection option, size option, conversion option and combination option. It analysis the characteristics and the real option features of large shipbuilding facility investment decision making in detail. Compared with traditional investment decision-making method of analysis , the paper expounds the application of advantages of real option method in the investment decision-making, the real options method can supplement and correct the implicit value of the management flexibility which is ignored by the traditional investment decision-making. Therefore, the paper chooses real option method for large shipbuilding facility investment decisions.(2) In the specific application of real options method for large-scale investment decisions, the paper recognizes the main types of real option in shipbuilding enterprises investment decisions according to the life cycle theory and affects of uncertainty. It contains four main types: the elastic of expanding the inductive shipbuilding ability and growth option, the elastic of mount or not and mount options, the elastic of investment timing and waiting option, the elastic of exiting and abandon option.(3) For ease of real options approach in large shipbuilding facility investment decision, the paper constructs corresponding option pricing model for four option types and verified through case analysis. Compared with traditional investment decision-making method contrast, it verifies the advantages of the method. The paper is instructive for shipbuilding industry investment decisions.