Abstract
A real option study on investment profitability of ASR recycling system using pyrolysis gasification process is conducted considering a Brownian price fluctuation model of actual scrap iron, copper, and aluminum market. It is clarified that the maximum allowable value of the initial investment I *, which is calculated from the expected present value of accumulated profits V, will determine if the project should start immediately or remain at hold. An example study with 2005 year scrap price as the project initial condition showed thatI * is smaller than V by more than 10% so that a large initial investment is hard to be executed. In order to accelerate such investment to the project, it is shown efficient to raise the ASR treatment price by about 20% larger than the present unit price.
