#TITLE_ALTERNATIVE#

• Main Author: ENDAH RENI PUSVITASARI (NIM : 12106057); Pembimbing : Dr. Rudianto Ekawan, ST. MT.
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/18401
• Institution: Institut Teknologi Bandung

The important factors that must be considered in the economic analysis are the risk due to uncertainty and time. The factors will influence the profitability of the project. We need the appropiate method for investment analysis to value the risk so we can maximize the profit from the project. <br /> <br /> <br /> The usual method that use for investment analysis is Discounted Cash Flow Analysis. However, the adjustment in this method is not complete because the adjustment is too static. Afterwards, there is introduced the Real Option Valuation Method to complete the inadequancy of Discounted Cash Flow Analysis. Real Options usually called the alternative method of Discounted Cash Flow Analysis. Real Option already included flexibility management to face uncertainty in the future. <br /> <br /> <br /> The investment analysis in this research have done with Real Option Valuation method. This research analysed mining investment project in PT. Arutmin Indonesia as one of the big mining companies in Indonesia. <br /> <br /> <br /> The investment analysis in this research show the results below : The Net Present Value of Discounted Cash Flow Analysis is $458.545.031 with discount rate is 10%. The most sensitive of cashflow component from sensitivity analysis is coal price. The option value of Real Option Valuation is $357.625.732 that show economic value of flexibility and the expandedNPV of Real Option Valuation is $815.684.981.