Question: Complete the following table by matching option types with correct descriptions. Option type Description Real option Growth option Allows adjusting operations based on changing conditions

Complete the following table by matching option types with correct descriptions.

Option type

Description

Real option

Growth option

Allows adjusting operations based on changing conditions during a project's life

Abandonment option

Allows delaying major expenditures until more information is available

Flexibility option

Allows expanding the original project's output

Investment timing option

Allows managers to influence the returns on a project

Allows reducing capacity or temporarily suspending operations

Fantasy Inc. is a firm that produces iPlanes, but due to changing economic conditions, the firm would now like to reduce its capacity temporarily. Which of the following real options would be the best choice for Fantasy's management?

Growth option

Investment timing option

Flexibility option

Abandonment option

Complete the following table by matching option types with correct descriptions.

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