Which real options have the ability to increase a project's NPV if they are included in project analysis?

Question

Quizplus · Accepted Answer

Real options such as the option to wait, abandon, and expand can increase a project's NPV if included in project analysis. The option to wait allows for flexibility in timing the investment, the option to abandon allows for cutting losses if the project is not performing well, and the option to expand allows for increasing the project's scope or capacity if demand is higher than expected. By considering these real options, the project can be more accurately evaluated and the NPV can be increased.

Which Real Options Have the Ability to Increase a Project's