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Copenhagen Business School FINANCE Corporate Quiz 7 Question1)Under what circumstances can real options decrease the value of a project? Real options, like financial options, can never have a negative value

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Copenhagen Business School

FINANCE Corporate

Quiz 7

Question1)Under what circumstances can real options decrease the value of a project?

• • Real options, like financial options, can never have a negative value. Therefore real options will always increase project value.
  • Real options can be costly to acquire or set up. These costs can outweigh the benefit of the real option.
• If real options are not exercised optimally they can decrease project value.

• None of the above