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. True or False: A real option embedded in a capital project gives the investing firm the right but not the obligation to buy, sell, or transfer an asset at a set price during a specified period of time. True False Which type of real option allows a firm to shut down a project if its cash flows are lower than expected? An abandonment option An output flexibility option An input flexibility option An expansion option Real option analysis adds value to a project when it is used for which of the following? Check all that apply. Identifying real options that can be sold in the financial markets Making managerial decision making less deliberate and analytical Modifying the way that decision makers perceive flexibility in capital budgeting activities Expanding the way that managers view risk and uncertainty, seeing them as phenomena to be appreciated and exploited rather than feared and avoided