Investment Decision-making Research For PPP Based On Real Option

This article analyses the defects of the traditional Net Present Value principle based on the characteristics of PPP project financing model, then with the introduce of the real options theory analysis of the PPP project investment decision-making evaluation, and establishes a mathematical model of a quantitative study.This article clarifies the applicability of the real options pricing principle in the PPP project investment decision-making, and proposes that there is the real option exists in the PPP projects, and clarifies the application of how to use real options principle to evaluate the value of the PPP projects, consequently, make the investment decisions of PPP projects.This article establishes a mathematical model of PPP projects' growth options, and makes the quantitative analysis of evaluation of the investment decision-making. We also amend the model against the situation that there is the loss of value with the projects so that the model has more practical value.This article analysis the investment decision-making game theory, analysis the options game of the PPP projects, evaluates the value of the PPP projects using option game theory methods. Thereby, further verify the reliability of model establishes in this paper, the PPP project investment decision-making pricing model.Through researching the most typical mode of operation of the PPP project, Beijing Metro Line 4 project on the PPP model, and its traditional NPV value and method of real options value were calculated separately, so we can certificates of the results of research on this: real options theory full taking into account the value of the investment opportunities and avoid the use of traditional NPV of the investment decision-making evaluation resulted in missed investment opportunities, also verified the effectiveness of mathematical models established in this article, the investment decision-making model.