Study on Multi-Stage Decision Evaluation Method of Infrastructure Construction Projects

Infrastructure constructions are hardware conditions for national and regional economic development. Due to the characteristics of long life cycle, high capital investment, complicated investment relations and flexible multi-stage decision, it is very difficult to evaluate the project of infrastructure construction. The reasonable and effective evaluation method is the key factor to affect the speed of investment recovery and infrastructure construction in the situation of resources and funds shortage. The multi-stage decision evaluation method is proposed based on the evaluation methods of net present value and real option, after transformation from the phase changes in the variables to the phase changes in the parameters by Itô random theorem. This method can satisfy the evaluation requirements of multi-stage decision project because the mutation factors of evaluated variables are considered, and the continuous assumption of valuation variables is removed.