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8. Real options Aa Projects are also often embedded with different options that can help making decisions under uncertainty. There are techniques used to evaluate
8. Real options Aa Projects are also often embedded with different options that can help making decisions under uncertainty. There are techniques used to evaluate these embedded options which are called real options. The mode's used to value these options are based on the type of the real option available for the project. True or False: A real option embedded in a capital project gives the investing firm the right and the obligation to buy sell, or transform an asset at a set price during a specified period of time. O False O True Which type of real option allows a firm to shut down a project if its cash flows are lower than expected? O A growth option O An abandonment option O An input flexibility option O An expansion option Real option analysis adds value to a project when it is used for which of the following? Check all that apply. Modifying the way that decision makers perceive flexibility in capital budgeting activities Making managers aware of the consequences of their decisions and actions on the creation or destruction or value for a capital project Making managerial decision making less deliberate and analytical Increasing the riskiness of the capital project and decreasing the project's cash flows
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