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7. 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 project to be expanded if demand turns out to be greater than expected? O Growth option O Investment timing option O Flexibility option 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 O More likely This is because if the operating cash flows from the project are stop the project. than expected, the company can exercise the abandonment option and