If the option to abandon is ignored,the

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Ignoring the option to abandon can lead to the overestimation of the net present value of a project. This is because the option to abandon is a real option that provides the company with flexibility and the ability to change course if the project becomes unprofitable. By ignoring this option, the potential costs of abandoning the project are not factored into the analysis, which can lead to an understatement of the project's risk and potential downside. Thus, the net present value can be overstated if the option to abandon is ignored.

If the Option to Abandon Is Ignored,the