Jim Owns a Farm That He Wants to Sell

question 7

Multiple Choice

Jim owns a farm that he wants to sell. He learns that a highway will be built near the farm in the future, giving access to the farmland from a nearby city and thus making the land attractive to housing developers. Expecting the net present value (NPV) of the sale to be greater after the highway is built, he decides not to sell at this time. What real option is Jim taking?

• A) option to delay
• B) option to expand
• C) option to abandon
• D) option to switch

---

Definitions:

Human Needs

Fundamental requirements necessary for individuals to live healthy and well-being lives, including physical, social, and psychological aspects.

Satisfied Need

A psychological or physiological requirement that has been fulfilled, reducing motivation to seek further fulfillment of that same need.

Motivator

Factors or influences that induce individuals to behave in a certain manner or pursue particular goals.

Belonging Needs

Psychological requirements for human well-being emphasizing the importance of interpersonal connections and being part of a group or community.