The time value of an option to invest in a real asset reflects ______.
A) managerial flexibility in the timing of investment
B) the value of the asset as a "now or never" proposition
C) the value of the option to delay the project
D) Three of the above
E) Two of the above

Question

Quizplus · Accepted Answer

The time value of an option to invest in a real asset reflects both managerial flexibility in the timing of investment (A) and the value of the option to delay the project (C), making E the correct choice.

The Time Value of an Option to Invest in a Real