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Economic valuation of investment projects, Using Real Option and scenario planning Case Study: Establishment of a Solar Farm in Iran
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Moslem Alimohammadi   , Adel Azar * , Ahmadreza Quasemi |
| Tarbiat Modares University |
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Abstract: (2859 Views) |
Abstract
Recently, investment in solar energy has increased in various countries, so increasing the complexity, dynamism of the conditions governing economic and financial activities, and consequently increasing the risk of investment decision-making, requires more advanced analytical methods. Traditional methods are static and do not take into account dynamics and future changes, while the value of an investment plan depends on a factor in addition to the current net present value. In response to the new needs, the analysis of real option, which takes into account the investor authority in strategic decisions and the creation of new opportunities in the future in analysis, has become widespread and widely used.
In this paper, economic evaluation using real option and binomial tree technique is considered in the construction of a solar power plant in Iran, so that four types of options, abandonment authority, project development, outsourcing and joint investment with a foreign company, was examined in this regard. Relevant calculations were performed in excel software.
The results showed that the investor will face 3 different strategic scenarios based on the situation in the next 5 years. |
Article number: 4 |
| Keywords: Solar Farms, Real Option, Binomial Tree, NPV |
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Type of Study: Research |
Subject:
Special
Received: 2020/01/10 | Accepted: 2021/06/30 | Published: 2022/10/29
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