Which One of the Following Statements Is Correct

question 18

Multiple Choice

Which one of the following statements is correct?

• A) Having the ability to temporarily cease operations is referred to as the option to abandon.
• B) Strategic options are relatively easy to evaluate using discounted cash flow analysis.
• C) Ignoring the option to expand causes the net present value of a project to be overestimated.
• D) The option to abandon a project has no real financial value.
• E) Ignoring the option to abandon causes the net present value of a project to be underestimated.

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