Applied Research On Capital Investment Decision Of Real Estate Based On Fuzzy Physical Option

With the increasing of complexity and uncertainty of the enterprise business environment, it has become more and more difficult to evaluate the real value of capital investment opportunities correctly due to the flaws of the ignorance on operation flexibility and strategic influence of the conventional investment decision methodology based on classic present value. As a result, it is very urgent and necessary to start the applied research on the real estate investment decision based on the fuzzy physical option.We respectively analyze the application of traditional decision method and physical option theory in the investment decision of real estate with combination of practice in this paper, and elaborate the limitation of the tradition decision method in reality and the advantages of physical option theory in investment decision problems, which actually reflects the project's true value because of its ability on the quantification of the investment opportunities and the option value of operation flexibility in the investment activities. Then after the careful analysis of the current and future market on the common houses, the villa and high-class residence in Xi'An, we put forward the physical option type implicated in the house market; and we take some kind of concrete physical option type (delayed option) as an example, in the meantime we deem the investor's optimistic extent to the real estate project's sales as a fuzzy variable with the introduce of the fuzzy theory, and employ the modified binary tree model to find a solution to the uncertain problem in real estate investment field to certain degree, making the physical option pricing be more practical.Thus, we use the expectation to compute the value of option to eliminate the vagueness. Finally, we make further empirical studies to the applied problem of the real estate investment decision based on fuzzy physical option on some Xi'An residence communities, and our results firmly validate our new methodology.With the deep research on the improved problem of real estate investment decision methodology, this thesis proposes a new fuzzy physical option method, by which we can assess the real value of the real estate investment, to provide effective support for investment decision maker,of the real estate development.