Gleason Research 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 the proposed projects can be abandoned at any time without penalty. Which of the following statements is CORRECT?
A. The abandonment option tends to reduce a project's NPV.
B. The abandonment option tends to reduce a project's risk.
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. A project can either have an abandonment option or an investment timing option, but never both.
E. Investment timing options always increase the value of a project.
Answer: B
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In Vagias v. Woodmont Properties, Vagias wanted to buy a house in Montville. He told his real estate agent that he wanted to buy in that location because of the school district's reputation. The agent showed him a house in a development called "Woodmont Court at Montville." Vagias asked if the house was within the jurisdictional limits of Montville. The agent and a representative for the builder, neither of whom were familiar with the township boundaries, assured him it was within the city limits. Vagias bought the house but was unable to enroll his son in the school district because the property was outside the city limits. Vagias sued, claiming he paid a premium for the house based on the school district's reputation. The homebuilder argued that the misrepresentations were
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a. True b. False Indicate whether the statement is true or false
If either party entering a contract lacks the capacity to contract, the contract is void or voidable, depending on the kind of incapacity involved.
Answer the following statement true (T) or false (F)
The _______________________ was jointly written by labor and management for regulating labor relations in the railroad industry.
Fill in the blank(s) with the appropriate word(s).