# Brownfield Redevelopment Evaluation Based on Fuzzy Real Options

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## Abstract

**:**

## 1. Introduction

## 2. Application Analysis of Fuzzy Real Option on Redevelopment Projects

#### 2.1. Real Option

#### 2.2. Fuzzy Real Option

#### 2.3. Real Option Characteristics of Brownfield Redevelopment Projects

#### 2.3.1. Uncertainty

#### 2.3.2. Irreversibility

#### 2.3.3. Flexibility

#### 2.4. Applicability of Fuzzy Real Option in Brownfield Redevelopment Projects

## 3. A Fuzzy Real Option Model

#### 3.1. Basic Real Option Model

#### 3.2. Valuation of the Expected DCF Value

#### 3.2.1. Fuzzy Process of Experts’ Opinions

#### 3.2.2. Weight Determination for Experts’ Opinions

#### 3.2.3. Determination of the Expected Value of DCF

#### 3.3. Estimation of Volatility $\sigma $ of the Expected DCF Value

#### 3.4. A Fuzzy Real Option Model in Consideration of Experts’ Preferences

## 4. Case Study Results and Analysis

#### 4.1. Case Introduction

$\mathit{V}$ | Exert 1 | Expert 2 | Expert 3 | Expert 4 | Expert 5 |
---|---|---|---|---|---|

${V}_{1}^{k}$ | 376,000 | 355,000 | 400,000 | 368,000 | 400,000 |

${V}_{2}^{k}$ | 398,332 | 445,000 | 440,000 | 456,000 | 500,000 |

#### 4.2. Identification of the Real Option in the Case

#### 4.3. Empirical Results

Parameter | Expert 1 | Expert 2 | Expert 3 | Expert 4 | Expert 5 |
---|---|---|---|---|---|

${a}_{k}$ | 387,166 | 400,000 | 420,000 | 412,000 | 450,000 |

${\sigma}_{k}$ | 13,412 | 54,051 | 24,022 | 52,849 | 60,056 |

#### 4.4. Results Analysis

## 5. Conclusions and Prospects

## Acknowledgments

## Author Contributions

## Conflicts of Interest

## References

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**MDPI and ACS Style**

Dai, H.; Sun, T.; Guo, W.
Brownfield Redevelopment Evaluation Based on Fuzzy Real Options. *Sustainability* **2016**, *8*, 170.
https://doi.org/10.3390/su8020170

**AMA Style**

Dai H, Sun T, Guo W.
Brownfield Redevelopment Evaluation Based on Fuzzy Real Options. *Sustainability*. 2016; 8(2):170.
https://doi.org/10.3390/su8020170

**Chicago/Turabian Style**

Dai, Hongjun, Tao Sun, and Wen Guo.
2016. "Brownfield Redevelopment Evaluation Based on Fuzzy Real Options" *Sustainability* 8, no. 2: 170.
https://doi.org/10.3390/su8020170