Which of the Following Is NOT a Typical Real Option

question 110

Multiple Choice

Which of the following is NOT a typical real option in capital budgeting?

• A) The option to expand the project
• B) The option to abandon the project
• C) The option to reduce the scale of a project
• D) The option to discount the project at a lower rate of return

---

Definitions:

Total Assets

The sum of all assets owned by a company, including both current and non-current assets.

Net Income

The amount of earnings left after all business expenses, including taxes, operating costs, and interest, have been subtracted from total revenue.

Trend Analysis

Trend analysis is a technique used in financial analysis and business strategy to identify patterns and predict future movements in data over time, often utilized for revenue, expenses, and stock prices.

Horizontal Analysis

A financial analysis technique that compares line items in financial statements over multiple periods to identify trends and changes.