The True Expected Value of a Project with a Growth

question 29

True/False

The true expected value of a project with a growth option is the expected NPV of the project (including the value of the option)less the cost of obtaining that option.

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Definitions:

Contingent Liabilities

Liabilities that may occur depending on the outcome of a future event.

Contingent Liability

A potential financial obligation that may occur, depending on the outcome of a future event.

Future Event

An occurrence or situation that has not yet happened but is expected or anticipated.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.