Briefly explain what is meant by a real option in capital budgeting. Give 2 concrete examples
What will be an ideal response?
Answer: Real options are opportunities to use information gained after a project is in progress to alter cash flow streams. If a project does not live up to expectations, perhaps it or the associated assets can be sold to another business for a profit, or at least as a way of cutting losses. If a project is successful, it might be possible to expand (e.g. increase production) or replicate it (open additional stores, restaurants, etc.)
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A measure of the time and effort required to deliver services in relation to their cost is called ____.
A. effectiveness B. efficiency C. quality D. economy
Which of the following is NOT a component of the Balanced Scorecard approach?
A. Competitor B. Learning C. Customer D. Financial
Which of the following is NOT normally regarded as being a barrier to hostile takeovers?
A. Targeted share repurchases. B. Shareholder rights provisions. C. Restricted voting rights. D. Poison pills. E. Abnormally high executive compensation.
GATT was based on negotiations between member countries to reduce worldwide tariffs and increase international trade.
Answer the following statement true (T) or false (F)