Which of the Following Statements Regarding Real Options Is NOT

question 63

Multiple Choice

Which of the following statements regarding real options is NOT correct?

• A) Real options should only be exercised when they increase the NPV of a project.
• B) Real options enhance the forecast of a project's expected future cash flows by incorporating, at the start of the project, the effect of decisions that will be made at a later date.
• C) Real options give owners the right, but not the obligation, to exercise these opportunities at a later date.
• D) Real options build greater flexibility into a project and thus increase its net present value (NPV).

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Definitions:

Maslow

A psychologist best known for proposing Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.

Fully Functioning Individual

A person who lives in harmony with their deepest feelings and impulses, exhibiting openness to experience and a willingness to live authentically.

Rogers' Characteristics

Attributes or qualities identified by psychologist Carl Rogers that contribute to a person's self-concept and personal growth, such as openness and empathy.

Actualizing Tendency

A concept in humanistic psychology referring to an innate drive within all organisms to grow, improve, and realize their fullest potential.