Which of the following is an example of a way in which companies can create value by exploiting real options?
A)Abandoning good projects in favor of newer projects
B)Acting quickly to take on new projects,even if there is no cost to waiting
C)Exercising in-the-money real options immediately
D)Optimally delaying or abandoning projects

Question

Quizplus · Accepted Answer

Optimal delaying or abandoning projects is an example of exploiting real options. Real options allow companies to postpone investment decisions until there is more certainty and flexibility in the market. By delaying or abandoning projects, companies can avoid sunk costs and potential losses if the market conditions are unfavorable. This can create value for the company by ensuring that resources are allocated only to projects that are likely to provide a positive return.

Which of the Following Is an Example of a Way