Question: Suppose a company uses the NPV method, along with risk-adjusted WACCs, to calculate project NPVs. However, it has not been considering real options in its

Suppose a company uses the NPV method, along with risk-adjusted WACCs, to calculate project NPVs. However, it has not been considering real options in its capital budgeting decisions. Now suppose the company changes its capital budgeting process to take account of four types of real options-timing, flexibility, growth, and abandonment. Would this decision be likely to affect some of the calculated NPVs? Explain your answer.

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