{"id":119064,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/budgeting-with-real-options"},"modified":"2017-08-12T06:59:30","modified_gmt":"2017-08-12T06:59:30","slug":"budgeting-with-real-options","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/budgeting-with-real-options\/","title":{"rendered":"Budgeting with Real Options"},"content":{"rendered":"<p>A capital investment project that generates new opportunities is more valuable than one that doesn&#8217;t. A flexible project, one that does not commit management to a fixed operating strategy is more valuable than an inflexible one. When a project is flexible or generates new opportunities for the company, it is said to contain real options.<\/p>\n<p>In this assignment, you are to discuss the budgeting implications of different option strategies and the cost-benefit issues associated with such decisions.<\/p>\n<ul>\n<li>Why might recognizing a real option raise but not lower a project&#8217;s net present value (NPV) as found in a traditional analysis? <\/li>\n<li>Why do we tend to underestimate NPV when we ignore the option to abandon?<\/li>\n<li>What do you suggest as a cost-effective approach to capital budgeting analysis when a project contains real options.&nbsp; <\/li>\n<\/ul>\n<p>Write a one-page memo in which you explain the answers to any two of the three questions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A capital investment project that generates new opportunities is more valuable than one that doesn&#8217;t. A flexible project, one that does not commit management to a fixed operating strategy is more valuable than an inflexible one. When a project is <a href=\"https:\/\/www.benedictsol.com\/blogs\/budgeting-with-real-options\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-119064","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/119064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=119064"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/119064\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=119064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=119064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=119064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}