A Research On Capital Investment Decision Based On Fuzzy Real Options Approach

The evaluation of the project is an important part of the capital investment, and the result is the key bases of the investment decisions. Because of the special nature of the capital investment, the traditional method of investment decision making can not measure the future existence of uncertainty and the management flexibility of modify or delay investment by investors, real options theory can effectively overcome these obstacles, but the current method have not take the realization degree of the options value into account.This paper takes venture capital investment decision as study background, first introduced the related theories of real options, pointed out the advantages and the current application problems of real options theory. Then it conducted the option analysis of venture capital, and pointed out the defects of the traditional evaluation method. The paper applied the real option method to the venture capital decision, and constructed the application framework of real option approach in capital investment. Finally, by using the results of the project comprehensive evaluation , combined with fuzzy math theory , this thesis deduced the fuzzy real option model, and verified the validity of fuzzy real option used in actual capital investment decision through specific case studies.Summarizing the paper, the conclusions are as follows:(1) Constructed the application framework of fuzzy real option in capital investment, defined the concrete steps of project decision-making. In the assessment and decision-making of venture capital investment, use the NPV method, AHP, fuzzy comprehensive evaluation method, fuzzy real option approach, and the sensitivity analysis method.(2) Deduced the fuzzy B-S option pricing model, which is more consistent with the actual situation compared with the traditional real option method. The traditional real option method did not take the implementation of the option value into consideration. However, the fuzzy real option approach considered the percentage for achieving the project option value of managers. In addition, the fuzzy real option approach greatly reduced the accuracy requirement of the estimates of the variables, which means more conducive to real options in the actual venture investment applications. (3) Developed a decision-making criteria of venture investment based on fuzzy real option. Decision-making not only depend on whether the NPV greater than zero, but specific decision-making analysis according to value of project comprehensive evaluation and fuzzy real option value, sometimes needed a re-evaluation of the project to make decisions.(4) Integrate venture investment evaluation system and real option approach organically, applied the conclusion of the evaluation system into decision-making, so as to better guide venture investment decision. Calculate the real option value of the venture project in the basis of comprehensive evaluation of the project, which consider the confidence of achieving the option value, this is more in line with the actual situation.