Research On Optimization Of S Company Project Investment Value Evaluation Method Based On Real Option

As China’s economy continues to grow,more and more companies are developing well,expanding investment and expanding factories.In terms of project management,companies must make a series of decisions about project investment.This process usually takes a long time.After many stages,it is an important part of financial evaluation.Whether the results of investment project value evaluation are correct or not often determines the success or failure of the project and affects the company’s vitality,emphasizing the importance of project evaluation in investment decision-making.In this article,the author mainly takes the stone processing factory as the research object.The reason for choosing it as the research object is that the project is large,the total development time is long,and there are many uncertain factors.It is a huge challenge for investors to make the most scientific decisions through various analyses.This article take the decision to evaluate the invest of the process plant project of S company as example,compare and analyze project value of traditional cash flow method and real option method.difference between valuate result of tradition net cash flow method and real option method is realized.It is concluded that there are many real possibilities in the S company’s project,and the real option method should be used to evaluate the S company’s project investment-S company adopts the actual option method,and the new plan is the project investment decision provided to the company’s management.First,the paper explain and summarize the concept,classification,characteristics and characteristics of project investment decision-making,and discovers the problems and limitations of using traditional cash flow decision-making methods for S company investment decision-making in Project A.On this basis,the traditional discount cash flow method is us evaluate the present value of the project and realize net present value.Therefore,this paper uses the idea of real options to identify the types of expansion options and abandonment options that can be included in the project,introduces the pricing methods of real options,evaluates their options,and uses the Black-Scholes model to price them.Finally,the author also uses the traditional cash flow method and real option method to reach a scientific conclusion.The document provides an innovative direction for the company’s project investment decision-making,and recommendations that the manage accept the new evaluation method,give full play to the role of the company fund,and create greater benefit for the company.