The Raider Research Co. regularly takes real options into account when evaluating its proposed projects. Specifically, it considers the option to abandon a project whenever it turns out to be unsuccessful (the abandonment option) and it evaluates whether it is better to invest in a project today or to wait and collect more information (the investment timing option). Assume proposed projects can be abandoned at any time without penalty. Which of the following statements is correct?

Group of answer choices

a. The abandonment option tends to reduce a project's risk.

b. The abandonment option tends to reduce a project's NPV.

c. If there are important first-mover advantages, this tends to increase the value of waiting a year to collect more information before proceeding with a proposed project.

d. All of the above are correct.

e. The first two choices listed are correct.