A Comparative Study On The Value Evaluation Of Forestry Investment Projects Based On The Real Option Method

In recent years,with the rapid development of my country’s forestry economy,the number of domestic forestry investment projects has gradually increased,but the quality of the projects is uneven,and the success rate of the projects cannot be guaranteed.The key to ensure the successful operation of the project is to reasonably evaluate the value of the project,but the current traditional value evaluation methods can only evaluate the static value of the project,and cannot accurately reflect the dynamic value in the operation process,which will not only affect the investor’s investment environment The judgment of this will make investors miss the best time to invest,and ultimately cause the failure of the project.The dynamic value of forestry investment projects comes from the project’s income uncertainty,investment irreversibility,management flexibility,and the option characteristics of natural growth and reproducibility.Therefore,the real option method can be used to evaluate the project more reasonably.The dynamic value in the market,thereby making up for the shortcomings of traditional value evaluation methods.However,there are relatively few researches on the application of real option method to forestry investment project value evaluation at home and abroad,and the research that considers the impact of wood and carbon sink price fluctuations on the overall value of forestry assets is still blank.Therefore,in order to verify the evaluation effect of the real option method on the value of forestry investment projects based on the price fluctuations of forest products and the fitting effect of the two pricing models of the real option method on the value of different types of options in the project,it is better for forestry investors Provide guidance for the application of the real option method.This study is based on the first-class inventory data in Guangxi,and the bare-land afforestation project of Guangxi Gaofeng Forest Farm with fir as the main species as an example.The traditional NPV is applied on the basis of considering the price fluctuations of fir and carbon sinks.The method,the Black-Scholes model,and the binary tree model have evaluated the value of the project,and compared and analyzed the results.The conclusions are as follows:(1)There are different types of real options at various stages of forestry investment projects,and these single options are combined to form a compound option.When evaluating the value of forestry investment projects,the real option method can be used to evaluate the compound option value of the project and make the evaluation result more accurate.It is scientific and accurate.(2)The volatility of forest product prices is an important source of uncertainty in forestry investment projects.As the volatility of forest product prices increases,the uncertainty in the project will continue to increase,and the impact on the value of the project will gradually Increase.Using the real option method,the price fluctuations of different underlying assets can be considered at the same time.By evaluating the real option value of each asset separately,a more reasonable total project value can be finally obtained.(3)When the price of forest products fluctuates greatly,the Black-Scholes model is more stable than the binary tree model,and the evaluation result is more accurate.At the same time,the two models have basically the same effect in fitting the option value under the condition of unchanged forest product prices,and the Black-Scholes model has a better fitting effect on the option value under the condition of rising and falling forest product prices.In practical applications,the two pricing models should be reasonably selected according to specific evaluation requirements and changes in forest product prices,so as to give full play to the advantages of the real option method.