Which one of the following statements best describes the most likely impact that a profitable abandonment option would have on a project's expected cash flow and risk?
A. No impact on the PV of expected cash flows, but risk will increase.
B. The PV of expected cash flows increases and risk decreases.
C. The PV of expected cash flows increases and risk increases.
D. The PV of expected cash flows decreases and risk decreases.
E. The PV of expected cash flows decreases and risk increases.
Answer: B
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