Real Options in Capital Budgeting Can Be Classified

question 55

Multiple Choice

Real options in capital budgeting can be classified.The classification that means that the project is delayed and can be termed "waiting to invest" is:

• A)Investment timing option
• B)Abandonment option
• C)Shutdown option
• D)Growth option

---

Definitions:

Liquidity

The ability of an asset to be converted into cash quickly without significant loss of value, indicating a company's capacity to meet its short-term obligations.

Receivables Turnover Ratio

A measure of how efficiently a company collects cash from its credit sales, calculated by dividing net credit sales by average accounts receivable.

Statement of Financial Position

A financial report that details an organization's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Carrying Amount

Carrying Amount is the value at which an asset is recognized in the balance sheet after accounting for depreciation, amortization, or impairment losses.