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:

Laboratory Experiment

A research method in which variables are controlled and manipulated in a structured environment to test hypotheses about cause-and-effect relationships.

Watching Behaviors

The act of observing actions and reactions of individuals or groups in a systematic manner to gather data or insights.

Intervening

The action of coming between so as to prevent or alter a result or course of events, often in the context of providing assistance or therapy.

Father Of Psychology

Wilhelm Wundt, often credited with establishing psychology as a distinct scientific discipline by founding the first laboratory dedicated to psychological research in 1879.