4. Real options 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? Abandonment option Investment timing option O Growth option Consider the following situation Arjen used an oil futures contract in order to price an exploration project that has an abandonment option. Is it more likely or less likely for Arjen to recommend accepting the project because it has an abandonment option? Less likely More likely