The Option to Switch Between Using Oil or Natural Gas

question 58

Multiple Choice

The option to switch between using oil or natural gas in a power station is:

• A) an option to expand.
• B) an option to abandon.
• C) a production flexibility option.
• D) a timing option.

---

Definitions:

Cash Flows

The overall volume of funds moving into and exiting a firm, which is crucial for its liquidity status.

Sale of Old Equipment

The process of disposing of outmoded or surplus equipment, typically to free up space or raise funds.

Cash Inflow

The total amount of money being transferred into a business, from operations, investments, or financing activities.

Existing Structure

The current organization or arrangement of a company's capital, operations, or physical layout.