Application Research Of Real Option Method In Investment Decision Of Overseas Engineering Projects

With the integrated development of the global economy,especially the deployment of "One Belt,One Road" initiative in recent years,the "going out"Operating of enterprises has become a hot topic.As one of the pillar industries of China's national economy,Whether construction companies can operate better is in the spotlight.Among them,evaluating the value of projects reasonably is very pivotal.The purpose of this paper is to provide a reference for investment decision makers through a case analysis.This paper firstly reviewed the latest theoretical results of real options at home and abroad,and clarifieed the current research status in China.On this theory basis,combined with the characteristics of overseas engineering projects,it's easy to found that the uncertainty risk has a certain impact on the value of overseas investment projects,and it's very applicable to the real option method.Then,combed out the application framework of real options,and through the case,the application ideas and steps of the real option method were further clarified.Then,it's found problems in the application.and proposed corresponding measures.In this case,this paper used the traditional net present value method and the real option method to evaluate the project value,and finds the results calculated by two methods is very different.However,in the application of the real option method,it's easy to find that there are some problems:the real option method only considers the value brought by the project uncertainty factor;the relevant parameters is difficult to obtain;the economic evaluation period will produce different results,etc.Then the paper puts forward relevant solutions:pay attention to the long-term social benefits of overseas engineering projects;improve the establishment of overseas engineering databases;improve the internal management level of overseas engineering projects.