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Real value option example a. Discuss the four kinds of Real value Options b. Would you accept the following project: NPV for new factory =

Real value option example

a. Discuss the four kinds of Real value Options

b. Would you accept the following project:

NPV for new factory = - $600 000.

Firm is evaluating an additional investment of $ 700 000(present value) to enable management to pay overtime to workers in the event this additional work and plant will create entrance into global markets. This option has a present value of $ 2 000 000

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