Question: The option to expand operations will be: a More valuable if the uncertainty associated with the increased cash flows from the expanded operation is greater.

The option to expand operations will be:

a

More valuable if the uncertainty associated with the increased cash flows from the expanded operation is greater.

b

More valuable if the cost of expansion is greater.

c

Less valuable if the time that is allowable to expand operations is greater.

d

More valuable if the current present value of the incremental cash flows from expansion are lower.

e

None of the above answers is correct.

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