Rejecting an Investment Today Forever Might Not Be a Good

question 32

Multiple Choice

Rejecting an investment today forever might not be a good choice because:
I. The size of the firm will decline.
II. There are always errors in the estimation of the NPVs.
III. The option value is negative.
IV. The company is foregoing future rights or the option to make the investment if economic and industry conditions change for the better.

• A) I only
• B) II only
• C) I, II, and III only
• D) IV only

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