Decision On Safety Investment Of Coal Mine Research Based On Real Option Theory

Coal mine safety accidents had gave mischance for millions of families, made severe economic damnify for our society. Although party and government paid more attention and did a lot of measures, the safety situation of coal mine was also severe. How to make the decision for safety investment was the imperative question to resolve.Traditional investment evaluation way had shown its disadvantage , and it couldn't meet the decision-maker real demand. Many people started to pay attention on the real option theory as a analysis tool for investment project day by day ,and many savants started to use real option theory to study the investment project. But few people put the real option theory on the safety investment project today, the paper was expounded based on the background.The decision of the safety investment the paper studied was in order to solve two facet questions. One was the decision on the choice of different scheme for the safety investment. Other was the decision on the performing opportunity of the option of the safety investment project.The paper based on the special character of the coal mine safety investment project, analyzed the real option character the safety investment project existed, and concluded the analysis frame model for the safety investment project on the base the real option theory. The model offered the reference for the analysis of real option character for the safety investment; And the paper was conducted by the value model of the real option theory, combining the special character of the safety investment project, built the value model for the safety investment project which had the real option character. The value model can offer the reference for the question of decision choosing; Through the compare between the NPV value and the real option value, evaluated the value of the project in the different stage, got the chance to implement the option, and built the model of the implementation option. The model can offer the reference for the question of the implementation decision.At the end, the paper did the demonstration study for question of the scheme choice decision through analysis on a alteration of a coal mine ventilation system. And proved the decision using the real option theory for the safety investment project is scientific.