Managing investment risks of a development project using the real option method
Virtsev M.Yu.1, Sayfullina F.M.1
1 Казанский государственный архитектурно-строительный университет
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Journal paper
Russian Journal of Entrepreneurship *
Volume 18, Number 23 (December 2017)
* Этот журнал не выпускается в Первом экономическом издательстве
Abstract:
Effective implementation of development projects is inextricably linked to the management of financial risks enabling to consider unstable environmental conditions, as well as giving managers the opportunity to make management decisions in the circumstances. This is an extremely important aspect for completing the construction of the facility with the planned targets.
The method of real options considered by the authors as one of the important elements of risk management during the implementation of development projects, allows not only to take into account the instability and uncertainty of the external environment, but also enables the developer to make managerial decisions for the successful completion of the construction site with planned time and cost parameters.
The presented conclusions can be useful for developers and other professional participants of the real estate market.
Keywords: cash flow, risk management, development project, real option, net present value of the project
JEL-classification: G32, G31, D81, G13
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