The timing option that gives the option to wait:
I.may be of minimal value if the project relates to a rapidly changing technology.
II.is partially dependent upon the discount rate applied to the project being evaluated.
III.is defined as the situation where operations are shut down for a period of time.
IV.has a value equal to the net present value of the project if it is started today versus the
Net present value if it is started at some later date.

Question

Quizplus · Accepted Answer

The timing option to wait is less valuable in rapidly changing technology (I), depends on the discount rate (II), and its value is the difference in NPV between starting now and later (IV).

The Timing Option That Gives the Option to Wait