On Investment Management Of Construction Project Based On Real Option Theory

In present China is experiencing the quick economic growth and the room for the construction project is huge. Meanwhile with the commercial and financial market developing, the uncertainty for the investment environment is keeping increasing. The traditional way for the project investment is hard to adapt itself to the more and more drastic competition and can result in the resource waste and low investment efficiency. So it is in need of new investment viewpoint to strengthen the guide to raise the investment and construction effect in order to make sure economic development durable and healthy.This paper, applying with the way of real option and aiming at the case of Guangzhou University town, would analyses the project investment management. The special point of real option theory is that it divides the valuation of project into two parts, one of which is the valuation decided by the traditional cash flow, the other of which is the special option valuation dealing with the uncertainty risk. The construction project of Guangzhou university town comprises a lot of increasing option and flexible option, so the investment decision and construction management need the way of real option to make the objective valuation.