The option to withdraw resources from projects that fail to live up to short-run expectations is know as a(n):

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The option to withdraw resources from projects that fail to live up to short-run expectations is known as an abandonment option. It allows a firm to cut its losses and redirect resources toward more promising projects. An expansion option refers to the ability to invest additional resources in a project that generates positive returns. A follow-on investment option allows a firm to invest in a project based on its success to date. A flexibility option refers to the ability to make changes to a project as new information arises.

The Option to Withdraw Resources from Projects That Fail to Live