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Which of the following statements is most accurate about real options? Using real options that allow companies to change capacity output reduces the value of
Which of the following statements is most accurate about real options? Using real options that allow companies to change capacity output reduces the value of the project. All real options allow companies to change capacity output in response to changing market conditions. Real options restrict companies to only change capacity output in response to changing market conditions. Certain real options allow companies to change capacity output in response to changing market conditions. Different methods are used to look for real options and valuing them. The following table lists five possible methods. Select their order of simplicity with 1 being the most simple procedure and 5 being the most difficult procedure. 1 2 3 4 5 Technique Use a standard model for a financial option. Use decision-tree analysis. Use discounted cash flow valuation and ignore any real options by assuming their values are zero. Develop a unique, project-specific model by using financial engineering techniques. Use discounted cash flow valuation and include a qualitative recognition of any real option's value
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