A Study On Application Of Real Options In Project Valuation For High-Tech Investment

High-tech investment projects face more uncertainty than the general ones. Traditional valuing approaches, however, did a poor job to evaluate projects under uncertain environment. Real option approach to project valuation can value the uncertainty. For the assumption doesn't suit for reality well, the application of real options is not extensive at the present time.This thesis researches on industrialized and applicable high-tech investment project under uncertain environment. And its theoretical basis is real options. Generally, the values fluctuation of project is supposed to be submitted to geometric Brownian motion in this text, and the project investment costs are taken fixed. That is not true in reality. The author analyses the influential factor of the value of high-tech investment project, identifies the chance value and the value of management flexibility, and establishes the evaluating frame and pricing models of high-tech investment project. Trapezoidal fuzzy numbers are quoted in this thesis to denote the change of income and cost. By fuzzy real options approach to valuation of an investment project of pharmaceutical and biotechnology, the validity and practicability of the fuzzy betterment are proved.Conclusions draw from the thesis are as follow: the real options approach can effectively and reasonably avoid undervaluation of high-tech project under uncertain environment. The results of real options approach should make more investors and decision-makers accept and understand. Fuzzy real options approach, comparing with the general ones, is more reasonable and practical.