Analysis of the impact of real options on investment project efficiency

Abstract

There are numerous solutions to enhance the efciency of investment projects, among which real options are a notable approach. To clarify this issue, this article employs qualitative methods to deeply analyze the impact of real options on the efciency of investment projects. The analysis results indicate that real options-such as the option to abandon the project early, the option to choose the project execution time, and the option to expand the project-each hold a certain value and can increase the overall value of the project. Therefore, this research is meaningful as a basis for businesses, commercial banks, and regulatory agencies to make more effective investment decisions.
Keywords
options investment project initial investment cost project efciency Net Present Value (NPV) Cash Flow (CF) discount rate

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