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Sonbull [250]
3 years ago
8

Why must real options have positive​ value? ​(Select all the choices that​ apply.) A. Real options must have positive value beca

use they can always be sold to recover the initial investment. B. Real options must have positive value because they are only exercised when doing so would increase the value of the investment. C. Having the real option but not the obligation to act is valuable. D. If exercising the real option would reduce​ value, managers can allow the option to go unexercised.
Business
1 answer:
murzikaleks [220]3 years ago
4 0

Answer:

B. Real options must have positive value because they are only exercised when doing so would increase the value of the investment.

C. Having the real option but not the obligation to act is valuable.

D. If exercising the real option would reduce​ value, managers can allow the option to go unexercised.

Explanation:

A real option is a choice made available to the managers of a company concerning business investment opportunities. It is referred to as “real” because it typically references projects involving a tangible asset instead of a financial instrument. Tangible assets are physical assets such as machinery, land, and buildings, as well as inventory.

A 'real option' is also a choice available to a company regarding an investment opportunity. The term 'real' means that it refers to a tangible asset and not a financial instrument. Examples of real options include determining whether to build a new factory, change the machinery and technology on a production line.

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You own factory A and factory B. The next cash flow for each factory is expected in 1 year. Factory A has a cost of capital of 3
ziro4ka [17]

Answer: See Explanation

Explanation:

First, we have to calculate the worth of factory A which will be:

= Cash flow / Cost of capital

= $19300 / 3.5%

= $19300 / 0.035

= $551428.57

= $551429

Cost of capital of Factory B = Cash flow / Worth

= $19,900 / $545,000

= 0.0365

= 3.65%

Cost of capital of Factory A = 3.5%

Cost of capital of Factory B = 3.65%

Worth of factory A = $551429

Worth of Factory B = $545,000

Therefore, factory A is more valuable than Factory B and Factory B is more risky than Factory A.

6 0
2 years ago
3. Vegetables wilt or soften and their color intensifies as they
maks197457 [2]

[] Answer []

\boxed{Boil}

[] Explanation []

<u><em /></u>

<u><em>Vegetables wilt or soften and their color intensifies as they boil</em></u>.

      When boiling vegetables, the food will be sitting in a pot of water with the heat on low, medium, or hight. Once the water gets warmer, the water will cook the vegetables, causing them to get tender and softer. This will cause the vegetables color to get darker, and go limp.

       When boiling vegetables, the flavor will not intensify, just the color, and it's shape. The water will drain any tase from the vegetable, but it will cause the food to go limp and get softer. Boiling is a famous way to cook your favorite vegetables, although the taste is not highly favored among lots of people.

\boxed{[] \ Eclipsed \ []}

8 0
2 years ago
As an advertising manager of a company, you have been asked to write out a proposal stating why the company should advertise and
e-lub [12.9K]

Answer:

Advertising

Explanation:

Considering the present market conditions in which this organization operates I propose to the Company Board that the organization starts advertising on various platforms considering the following reasons:

1. Increase Profit:

When we advertise, we create more sales which in turn leads to an increase in profits.

2. Market share:

The market share for this the company expands as a result of increased customers; due to advertising.

3. Builds Goodwill:

As the company becomes a very popular company because of growing advertising it will increase the trust if customers coming.

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3 years ago
On July 1, a company paid the $600 premium on a one-year insurance policy with benefits beginning on that date. What will be the
Schach [20]

Answer:

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When insurance is paid in advance, the entries required are

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As time elapses and the insurance expires,

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A setting of plainsong with two to four notes per syllable is called:
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Neumatic gregorian chant
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