A manager is considering taking a project this fiscal year or waiting for a few years before committing.What method should she use to take this decision?

Question

Quizplus · Accepted Answer

Real option analysis incorporates the flexibility to delay or abandon a project in the future based on market conditions or changes in the business environment. This method recognizes that the value of a project may increase or decrease over time, and allows for the consideration of the potential value of delaying a decision. Therefore, a manager should use real option analysis to take this decision.

A Manager Is Considering Taking a Project This Fiscal Year