Investment Decision-making And Engineering Project Construction Benefit

A long period of time, traditional financial analysis methods, represented by NPV, have been the core of a project investment decisions, but in the practical application, these methods have been unable to overcome its own errors and defects. Therefore, this article mainly discussed how to amend and perfect the traditional theory of investment options in the decision—making methods.Along with the economical and technical rapid development, the investment risk and the uncertainty increasing, the investment method is newer day by day, and the traditional investment decision method has been already difficult to be competent. This article first carries on the detailed analysis of the traditional investment decision-making method, and points out all the good and bad points which exist in its practical application. Then, through the analysis of optional impact on investment decision-making in project investment process, from the perspective of real options conducts the further research and the discussion to the project investment question, and proposes that the application of " real option theory " in project investment decision-making is the supplement and perfect to the traditional investment decision-making method. The theory of real option using in traditional method can break through the constraint and make the investment decision of administrator more scientifically and more reliable.