After taking into account the value of real options, it is possible that some projects with a negative NPV should be pursued.

Question

Quizplus · Accepted Answer

Real options analysis considers the value of flexibility and options embedded in a project, which can create additional value that is not captured in traditional net present value (NPV) analysis. Therefore, a project with a negative NPV could still be worth pursuing if it has valuable real options that generate positive outcomes in the future.

After Taking into Account the Value of Real Options, It