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Why Is Straight NPV Analysis Flawed as Compared to Models

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Why is straight NPV analysis flawed as compared to models that include option pricing in the NPV analysis?


Definitions:

Quarantine Doctrine

A geopolitical strategy aimed at isolating a country or region to prevent the spread of ideologies or infectious diseases, often by imposing restrictions on travel or trade.

Four Freedoms

A set of ideals proclaimed by President Franklin D. Roosevelt including freedom of speech, freedom of worship, freedom from want, and freedom from fear.

"Good Neighbor" Policy

A foreign policy approach adopted by the United States, first mentioned by President Herbert Hoover but more closely associated with President Franklin D. Roosevelt, aimed at strengthening diplomatic and economic relations with Latin American countries in the 1930s, emphasizing cooperation and non-intervention.

"Gentleman's Agreement"

An informal and unwritten agreement upheld by the honor of the parties involved, rather than by legal obligation.

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