4. Real options Aa Aa Though complicated, real options help managers make more informed decisions in selecting projects that add value to a firm. Which type of real option allows a firm to shut down a project if its cash flows are lower than expected? Growth option O Abandonment option O Investment timing option Consider the following situation: Iniesta, a senior options analyst for a manufacturing firm, developed a simulation program that estimates the potential results of prospective projects. The company uses this simulation process to determine the value of different options before making final decisions. The valuation possibly being used by Iniesta and his team is called: O The Black-Scholes option pricing model O A risk-neutral valuation