All of the following increase the value of real options EXCEPT:
A)Increase the present value of expected operation cash flows
B)Decrease uncertainty of expected cash flows
C)Reduce value lost by waiting to make full investment
D)Use a signaling device to various industry players

Question

Quizplus · Accepted Answer

Decreasing the uncertainty of expected cash flows actually reduces the value of real options. Real options value increases with higher uncertainty, as they provide the flexibility to make decisions based on future outcomes which are uncertain.

All of the Following Increase the Value of Real Options