It is often argued that the two most important real options available to a manager evaluating investment decisions are the option to defer an investment decision and the option to abandon an investment decision. Explain the significance of these two options. What insights could the ROV or the DTA model provide into these decisions?
Answer to relevant QuestionsWhat are the benefits of a long-term perspective on value creation? For companies? For the economy? The option to defer an investment reduces risk for a company because it does not need to commit the full investment outlay until there is more certainty about the true value of the underlying asset. But the implied cost of ...Many emerging economies have restrictions on capital outflows to protect their growth and stability; for example, they may impose high taxes on repatriated profits by foreign companies. Where andhowwould you include such ...How does the total market for a new product differ from a company’s addressable market? Which market is more relevant for forecasting a company’s revenues? What are the potential reasons cyclical companies invest cyclically rather than countercyclically?
Post your question