The option to abandon is A

Finance May 02, 2021

The option to abandon is
A. a real option. 8. usually of little value because of the costs associated with abandonment. C. irrelevant in capital budgeting analysis. D. nearly always less relevant the option to expand. E. of no value to a project.

Expert Solution

Answer

A .

Explanation

The option to abandon is definitely of value as it gives the firm an option to abandon an unprofitable project and is quite relevant in capital budgeting analysis. So, the correct option is A "Real Option".

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