Discounted cash-flow (DCF) analysis generally
A)assumes that firms hold assets passively when they invest in a project.
B)considers opportunities to expand a project if the project is successful.
C)considers opportunities to expand a project if the project is successful and considers opportunities to abandon a project if the project is a failure.
D)assumes that firms hold assets passively when they invest in a project, considers opportunities to expand a project if the project is successful, and considers opportunities to abandon a project if the project is a failure.

Question

Quizplus · Accepted Answer

DCF analysis typically assumes that firms hold assets passively and does not inherently account for managerial flexibility such as expanding or abandoning projects.

Discounted Cash-Flow (DCF) Analysis Generally