Abstract: The thesis draws lessons from thought and method of financial option pricing model, through setting up flexible model for valuation the value of R&D upgrading, has obtained analytic formula and optimal investment criteria. Through numerical analysis the thesis finds one conclusion contrary to tradition, R&D upgrade investment options worth has positive relationship with risk interest rate and fluctuation rate, but negative relationship with the rate of loss delaying. The thesis has carried on the detailed explanation to this kind of result afterwards, then analyzed the reason for forming the traditional conclusion. The thesis explains investment decision of R&D upgrading through case analysis finally.

Key words: R&D upgrading, value of investment, option pricing model, software enterprise