Empirical Analysis on Project Investment Decision Based on the Binary Tree Model

With the fast development of economy, the project investment method became the most attractive and prosperous way of infrastructural facilities investment. At the same time, the problem of BOT project investment risk has gained increasingly more people´s attention. This paper applies real option theory to BOT project investment decision. The BOT project investment decision model based on the binary tree mode is put forward in this paper. At the end, a practical investment project is given to clarify the procedure of using the model.