In the example of Canada Motors on p.571 of the text,it presents that if the future costs (benefits)are uncertain,we must use ________ approach to determine the correct decision.
A) a real options
B) an abandonment option
C) a financial option
D) a growth option

Question

Quizplus · Accepted Answer

Real options analysis is used when future costs or benefits are uncertain. It allows decision makers to take into account flexibility in decision making and the potential value of waiting to make a decision. Therefore, A) a real options approach is the best choice for determining the correct decision in situations with uncertain future costs or benefits.

In the Example of Canada Motors on P