The option to abandon a project before the end of its forecasted life may increase its NPV.

Name: The option to abandon a project before the end of its forecasted life may increase its NPV.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the project is not generating the expected cash flows or if its future projections indicate that it will not generate positive cash flows, abandoning the project may be a better option than continuing with it. This would reduce the overall cost and may increase the project's net present value (NPV).

The Option to Abandon a Project Before the End of Its