Which One of the Following Statements Is Most CORRECT

question 10

Multiple Choice

Which one of the following statements is most CORRECT?

• A) Real options change the size,but not the risk,of projects' expected NPVs.
• B) Real options change the risk,but not the size,of projects' expected NPVs.
• C) Real options can reduce the cost of capital that should be used to discount a project's expected cash flows.
• D) Very few projects actually have real options.They are theoretically interesting but of little practical importance.
• E) Real options are more valuable when there is very little uncertainty about the true values of future sales and costs.

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