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 avaliable for the project. True or False: A real option embedded in a capital profect gives the investing firm the right but not the obligation to buy, sels, or transfer an asset at a set price during a specifled period of time, True Folse The managers of Amalgamated Football League Inc, have included a shutdown option into the design of a proposed capital investment projecti 1. This option provides a firm with the flexiblity to make potentially profitable investments in the future that would not have been. possible if the initial project had not been undertaken II. This option aliows a firm to temporarily terminate operations in order to prevent experiencing negative cash flows. III. This option allows a project to be expanded if demand turns out to be greater than expected. IV. This option allows the outputs of the production process to be altered if market conditions change during a project's life. Which of the listed statements best describes a shutdown option? Statement If Statement 1 Statement IIt Statement IV None of the statements listed above describes a shutdown option. Real option analysis adds value to a project when it is used for which of the followin Modifying the way that decision makers percelve flexibility in capital budgi Making changes to the capital budget before it is started and financed