Which of the following statements regarding real options is NOT correct?
A) Real options should only be exercised when they increase the NPV of a project.
B) Real options enhance the forecast of a project's expected future cash flows by incorporating, at the start of the project, the effect of decisions that will be made at a later date.
C) Real options give owners the right, but not the obligation, to exercise these opportunities at a later date.
D) Real options build greater flexibility into a project and thus increase its net present value (NPV).
Answer: B
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Which of the following statements is false?
a. A performance measure that encompasses a firm's long-run average activity is referred to as ideal activity. b. A performance measure that is short-term in nature and represents a firm's anticipated activity level for the upcoming period is expected capacity. c. A performance measure that assumes all production factors are operating perfectly is referred to as theoretical capacity. d. The performance measure that takes into account routine interruptions is known as practical capacity.
________ is an aspect of entrepreneurship that refers to doing the most work with the fewest resources.
A. Innovation B. Customer-focus C. Creation D. Efficiency
When implementing a high-performance work system, allocating resources and empowering others would be part of which step?
A. Engage stakeholders B. Build a case for change C. Communication D. Evaluate/Sustain
The firm's ________ indicates the degree to which effective use of borrowing contributed to the firm's ROE
A) asset turnover B) financial leverage C) profit margin D) return on assets