The feasibility study of investment in public hospital construction project using the real options model
نویسندگان
1 Department of Health Promotion and Education, School of Public Health, Tehran University of Medical Sciences, Tehran, Iran
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4 Department of Commercial Economy, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran
doi
چکیده
BACKGROUND: The investment decision can be affected by changing levels of uncertainty and risk.The main objective of this research was to identify, characterize, and quantify the parameters whichare essential in evaluation hospital construction projects and provide useful modeling techniques togive the best investment decisions for investors in Iran’s health‑care projects investment.MATERIALS AND METHODS: The methodology of this study was employing discounted cashflow (DCF) and real option valuation to investigate the feasibility investment in the public hospitalconstruction project. The Islamshahr, Mashhad, and Fardis hospitals were included in the analysis.Economic indices of DCF methods were internal rate of return (IRR) and net present value.RESULTS: The economic evaluation of the Black–Scholes model was almost as same as the binomialtree model, but there was a significant difference between the real options model and traditionalmethods. According to the traditional methods, the profitability with IRR for Islamshahr, Mashhad,and Fardis hospital projects was 35%, 43%, and 26%, respectively. Black–Scholes model showedprofitability only for Islamshahr and Mashhad hospitals, and there was no adequate profitability forinvestors of Fardis Hospital project during the study.CONCLUSIONS: The methods derived from the real options valuation could provide a more flexibleand reliable indices for investors in dynamic and high revolution economic conditions. On the otherhand, dynamic economic evaluation models can be applied to correctly evaluate the projects becauseof Iran’s health revolution and its health plans.
