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@article{ART001351662},
author={Jun, Jaebum and Kim, Sungil},
title={Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making},
journal={The Korea Spatial Planning Review},
issn={1229-8638},
year={2009},
volume={61},
pages={25-39},
doi={10.15793/kspr.2009.61..002}

TY - JOUR
AU - Jun, Jaebum
AU - Kim, Sungil
TI - Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making
JO - The Korea Spatial Planning Review
PY - 2009
VL - 61
IS - null
PB - 국토연구원
SP - 25
EP - 39
SN - 1229-8638
AB - Many countries in the world have attracted private participation, in providing infrastructures, to overcome limited funds and reduce risks involved in those projects. And, project finance is considered effective to accomplish this public-private partnerships. In general, there exist lots of complicated uncertainties in project finance due to long-term concession and huge project size. Among these uncertainties, the strategic decision-making of investment time delay has been problematic, even if it seems to have an impact on project value, because traditional capital budgeting theory, NPV analysis, fails to assess its contingency. Therefore, the purpose of this paper is to provide a theoretical framework in evaluating this strategic decision-making in project finance. To understand the impact of time delay on project value, real option framework based on financial option pricing theory is applied. In turn, the quantitative value of time delay obtained by real option framework is compared and analyzed with that of NPV analysis. At last, because the value of strategic decision-making appears significant against project value, it needs to be taken into account when implementing financial feasibility analysis.
KW - Private Investment;NPV(Net Present Value) Analysis;Option Pricing Theory;Time Delay;Strategic Decision-Making;Construction Financing
DO - 10.15793/kspr.2009.61..002
ER -

Jun, Jaebum and Kim, Sungil. (2009). Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making. The Korea Spatial Planning Review, 61, 25-39.

Jun, Jaebum and Kim, Sungil. 2009, "Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making", The Korea Spatial Planning Review, vol.61, pp.25-39. Available from: doi:10.15793/kspr.2009.61..002

Jun, Jaebum, Kim, Sungil "Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making" The Korea Spatial Planning Review 61 pp.25-39 (2009) : 25.

Jun, Jaebum, Kim, Sungil. Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making. 2009; 61 25-39. Available from: doi:10.15793/kspr.2009.61..002

Jun, Jaebum and Kim, Sungil. "Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making" The Korea Spatial Planning Review 61(2009) : 25-39.doi: 10.15793/kspr.2009.61..002

Jun, Jaebum; Kim, Sungil. Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making. The Korea Spatial Planning Review, 61, 25-39. doi: 10.15793/kspr.2009.61..002

Jun, Jaebum; Kim, Sungil. Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making. The Korea Spatial Planning Review. 2009; 61 25-39. doi: 10.15793/kspr.2009.61..002

Jun, Jaebum, Kim, Sungil. Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making. 2009; 61 25-39. Available from: doi:10.15793/kspr.2009.61..002

Jun, Jaebum and Kim, Sungil. "Financial Feasibility Analysis of Project Finance Considering Strategic Decision-making" The Korea Spatial Planning Review 61(2009) : 25-39.doi: 10.15793/kspr.2009.61..002