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, the option to abandon, and the option to expand, have the potential to increase a project's NPV if included in project analysis. By waiting, the project may have the opportunity to take advantage of better market conditions or technological advancements. If the project is not performing as expected, the option to abandon may prevent further losses. The option to expand may also increase the project's value by allowing for future growth and increased profitability. Therefore, the inclusion of these real options can have a significant impact on a project's NPV.

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