Why Is It Important to Consider Real Options in the Capital

question 77

Essay

Why is it important to consider real options in the capital budgeting process? Give two specific examples.

---

Definitions:

Margin of Error

An expression of the amount of random sampling error in a survey's results, indicating a range within which the true population parameter is expected to lie.

Confidence Interval

An array of values, produced from sample statistics, that has the potential to include the value of an undetermined population characteristic.

Sample Size

The number of individuals or observations included in a statistical sample.

Standard Deviation

A gauge for the extent of fluctuation or divergence in a group of numbers.