9. Real options Projects are also often embedded with different options that can help making decisions under uncertainty. There are techniques used to evaluate these embedded options which are called real options. The models used to value these options are based on the type of the real option available for the project.

9. Real options Projects are also often embedded with different options that can help making decisions under uncertainty. There are techniques used to evaluate these embedded options which are called real options. The models used to value these options are based on the type of the real option available for the project. Real options increase the value of capital investment projects. Which type of real option allows the outputs of the production process to be altered if market conditions change during a project's life? O An expansion option O A growth option O A shutdown option O An output flexibility option Real option analysis adds value to a project when it is used for which of the following? Check all that apply. Expanding the way that managers view risk and uncertainty, seeing them as phenomena to be appreciated and exploited rather than feared and avoided Making managerial decision making less deliberate and analytical Making changes to the capital budget before it is started and financed Modifying the way that decision makers perceive flexibility in capital budgeting activities