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 models 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 The managers of Aberdeen Petroleum Refiners Corp. have included an abandonment option into the design of a proposed capital investment project: I. This option allows a firm to shut down a project if its cash flows are lower than expected. II. This option allows a project to be expanded if demand turns out to be greater than expected. III. This option allows the outputs of the production process to be altered if market conditions change during a project's life IV. This option allows a firm to postpone a project until it can gather more information or market conditions change. Which of the listed statements best describes an abandonment option? O StatementI O Statement II O Statement III O Statement IV O None of the statements listed above describes an abandonment option