Investment Decision Of Jinan Urban Rail Transit Under The Real Option Theory

The construction of urban rail transit is of great significance to the development of the city.Convenient transportation methods can shorten the spatial distance,promote the flow of economic factors,and increase the scope of urban radiation.The rail transportation volume is large and fast,providing relatively comfortable travel conditions,reducing the economic cost of urban development,and driving the development of surrounding areas through rail transit stations,creating a good environment for optimizing,improving urban functions and giving full play to the land.condition.Due to its quasi-public welfare,the government generally dominates the planning and investment decisions of the project.Moreover,the project has high uncertainty,and the large investment scale and long construction period have prompted the government to make a scientific and effective assessment of the value of the project in the investment decision-making process.Taking Jinan R1 subway line as an example,this paper discusses the application of multiple models of real option method in this project,and further extends to the situation in incomplete market.Firstly,the paper analyzes the investment characteristics of the project,expounds the basic concept of real option theory,and calculates the various parameters of the project according to the cash flow statement,discusses the irrationality of the project under the traditional investment decision-making method,and demonstrates that The feasibility of the real option approach applied to the project.Then,the paper further applied a variety of models to calculate the option value and the optimal investment time point of the project.Finally,it is extended to the incomplete market and the option value interval of the project under this circumstance is calculated.