PROJECT VALUATION OF PT CITA MINERAL INVESTINDO TBK. FOR FIVE YEARS PERIOD USING REAL OPTIONS WITH LEARNING PROCESS
PT Cita Mineral Investindo Tbk. is a company that mines and processes bauxite into aluminum. Companies make investments decisions after completing an evaluation process. Valuation is frequently performed using traditional evaluation methods such as Discounted Cash Flow (DCF), but this method does...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/81772 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | PT Cita Mineral Investindo Tbk. is a company that mines and processes bauxite into
aluminum. Companies make investments decisions after completing an evaluation process.
Valuation is frequently performed using traditional evaluation methods such as
Discounted Cash Flow (DCF), but this method does not take account market uncertainties.
Learning option allows manager to gather project-related information, causing
volatility to decrease gradually. As a result, real options combined with learning options
is a better approach than DCF method because it allows managerial flexibility
in investment decision making. In this research, the exploration activity project of PT
Cita Mineral Investindo Tbk. in the time period of five years will be evaluated using
Guthrie’s binomial tree and Haahtela’s trinomial tree. The application of real options
equipped with learning options can increase the value of project rights so that companies
may identify optimal investment strategies. |
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