The NPV approach must be:
A) augmented by added analysis if there are a few embedded options.
B) augmented by added analysis if a decision has significant embedded options.
C) jettisoned if there are any embedded options.
D) computed carefully to identify the options.

Question

Quizplus · Accepted Answer

The NPV (Net Present Value) approach should be augmented by added analysis if a decision has significant embedded options because these options can significantly affect the project's risk and potential returns, which are not captured by traditional NPV calculations alone.

The NPV Approach Must Be