Homework answers / question archive / Are each of the statements below correct? Explain your answer

Are each of the statements below correct? Explain your answer

Finance

Share With

Are each of the statements below correct? Explain your answer. Statement 1: For independent projects, an analyst must determine a value for the real option that is separate from the project regardless of the profitability of the project. Statement 2: Abandonment options can be valuable, but should only be exercised when the abandonment value is greater than the discounted present value of the remaining cash flows of the project.