True or False: The preceding statement is correct.

True

False

Which type of real option allows a firm to postpone a project until it can gather more information?

Flexibility option

Expansion option

Abandonment option

Timing option

Consider the following example:

Smoltz Motors has plants around the country that specialize in specific models of cars. Smoltz has determined that lower demand has led the firm$$s inventory of SUVs to be too high. Smoltz wants to stop production for its SUVs and focus on its sedans.

This example describes a real option to$.$