Which of the Following Is an Example of a Way

question 52

Multiple Choice

Which of the following is an example of a way in which companies can create value by exploiting real options?

• A)Abandoning good projects in favor of newer projects
• B)Acting quickly to take on new projects,even if there is no cost to waiting
• C)Exercising in-the-money real options immediately
• D)Optimally delaying or abandoning projects

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Definitions:

Present Value

The value today of a future sum of money or sequence of cash flows, when discounted by a certain rate of return.

Float

The total number of shares of a company that are available for trading by the public.

Checks

Financial instruments that order a bank to pay a specific amount of money from the writer's bank account to the person or entity in whose name the check has been issued.