Which of the Following Are Hidden Options in Capital Budgeting

question 61

Multiple Choice

Which of the following are hidden options in capital budgeting?

• A)option to expand.
• B)timing option.
• C)option to abandon.
• D)All of the above.
• E)None of the above.

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Definitions:

Subject to the mortgage

This phrase denotes that a property is encumbered by a mortgage, meaning any dealings with the property must take into account the mortgage's terms and conditions.

Unregistered Mortgage

An unregistered mortgage refers to a mortgage agreement that has not been formally recorded with a governmental registry or legal authority, potentially affecting its enforceability and priority against other claims.

Prevailing Interest Rates

are the current rates of interest which banks and other financial institutions charge on loans and pay on deposits.

Second Mortgages

A type of mortgage taken out on a property that is already mortgaged, generally used to access home equity.