Which of the Following Is Most CORRECT

question 17

Multiple Choice

Which of the following is most CORRECT?

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

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Definitions:

Low Ranks

Positions or statuses that are at the bottom or lower levels within a hierarchical organization or system.

McDonaldized

Referring to the process by which the principles of the fast-food industry, such as efficiency, predictability, and control, are coming to dominate more sectors of society and more organizations.

Predictability

The ability to accurately forecast future events or behaviors based on current or past patterns.

Standardization

The process of implementing and developing technical standards to optimize compatibility, safety, repeatability, or quality.