When a firm has a real option to invest in the future,it is known as a ________.Because these options have value,they contribute to the value of any firm that has ________ investment opportunities.
A) growth option; future possible
B) delayed option; future possible
C) abandonment option; present possible
D) financial option; present possible

Question

Quizplus · Accepted Answer

A growth option is a real option that allows a firm to invest in the future by taking advantages of opportunities that may arise. The value of a growth option contributes to the overall value of the firm. Delayed, abandonment, and financial options are not typically used to describe investment opportunities.

When a Firm Has a Real Option to Invest in the Future,it