Which three of the following accurately relate to the real options approach?
A) It takes future managerial flexibility into account.
B) It allows managers to amend decisions in the light of future events.
C) It differs from the NPV approach, which does not offer future flexibility.
D) It does not allow managers to expand the plans in future.

Question

Quizplus · Accepted Answer

The real options approach takes future managerial flexibility into account, as it allows managers to amend decisions in the light of future events. It differs from the NPV approach, which does not offer future flexibility. However, the real options approach does allow managers to expand the plans in future if the circumstances are suitable. Therefore, option D is incorrect.

Which Three of the Following Accurately Relate to the Real