What is a real option?

Q: Which is the better investment option?

A: The process of finding the present value using the future value, interest rate and the compounding…

Q: What is the IRR of this offer?

A: Capital budgeting methods are the used for finding the profitability of capital projects. It is a…

Q: What is meant by a “real option”?

A: Real option: It may be a selection made open to a firm's managers about the prospects for trade…

Q: What is the best-case scenario?

A: When companies are uncertain about the details of a project such as costs, inflows, interest rate…

Q: which alternative is the best choice?

A: Time value of money(TVM) means that the amount of money received in the present period will have…

Q: What is the difference between a Put option and a Call option? Explain. Provide examples.

A: Option is a derivative instrument which gives a choice to its buyer to buy or sell the underlying…

Q: What is horizon value?

A: Horizon value is the value of the project or the security at the end of a specified future date. The…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: What is the going concern assumption?

A: Going concern Assumption: On the basis of Going concern assumption Financial statements are…

Q: How widely used is real option analysis?

A: Real option analysis is the analysis of a company’s opportunity cost of an investment or a…

Q: what is the difference between a call option and a put option?

A: There are two types of options one is call option and other is put option and both are derivative…

Q: What is the Black Scholes Model?

A: Black Scholes Model is an option pricing model.

Q: What is a call option?

A: The contract that the option writer sells to the option holder is represented by an option, which is…

Q: What exactly does the term "FMS option" imply and what is its significance?

A: A flexible manufacturing system (FMS) can boost productivity and minimize production costs. Flexible…

Q: What is naked call option?

A: An option is a financial derivative giving the buyer of option to buy or sell the option at a price…

Q: What Does RiskReally Mean?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: What are the Monroe plans?

A: Munroe Plan is a health care service organization that meets the needs of low-income as well as…

Q: What is the y risk-free investment?

A: Risk-free rate of return is the rate of return that an investor expects from an investment in any…

Q: How about the second question?

A: As per the accounting standard- the effects of changes in foreign exchange currency, income and…

Q: What is the big bang approach?

A:

Q: What is option?

A: Options are the derivatives contract that gives investor discretion to sell or buy the assets like…

Q: What is an option? A call option? A put option?

A: Option: An option is a special type of contract which gives its holder the right but not obligation…

Q: Why option A is incorrect?

A: revenue is generated by the business whenever  goods or services are sold by the business.this leads…

Q: What is the definition of "FMS option"?

A: Stock Option: An investor who purchases a stock option has the right, but not the responsibility, to…

Q: Which of the following value is concerned with the way we approach the end states?

A: Option a

Q: FMS option

A: An option is the right to purchase a stock (or another asset) at a predetermined price and time. On…

Q: What is the FMS option?

A: FMS: Flexible manufacturing system

Q: What is offer price?

A: Bid price is the maximum price which the buyer is willing to pay to purchase. In other words, it…

Q: Why the prospect theory is important

A: Introduction:- Prospect theory is very important because it elaborates how we understand and value…

Q: wHAT IS PRESENT VALUE?

A: Present value also known as PV is the value of a future sum of money discounted at specified rate of…

Q: What are the two keys in short-term decision making?

A: Definition:   Differential analysis: Differential analysis refers to the analysis of differential…

Q: What is flexibility option?

A: A financial instrument that provides the opportunity to the buyer and seller to purchase and sell…

Q: What is the fair value option?

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: Is the accept-or-reject decision rule the same as in the simple -investment case? Explain how?

A: Yes, accept or reject decision rule is the same as in the simple investment because accept or reject…

Q: What are some types of real options?

A: Real options is defined as a capital budgeting decision with which the management may make a future…

Q: What exactly does "FMS option" mean?

A: The term FMS stands for flexible manufacturing system. It is a manufacturing system which is…

Q: Which of the above should be chosen?

A: Net Present Value (NPV) NPV (Net present value) is a capital budgeting technique used to evaluate…

Q: What is option value (of project)?

A: Option value of the project is the real option approach of evaluating projects that views selecting…

Q: which investment is preferable?

A: The present value is the present worth of the amount that will be paid or received at present.

Q: Define the Make-or-Buy Decision?

A: A make or buy decision is to choose whether to manufacture the produce in-house or purchase it from…

Q: What is the make or buy decision?

A: Managerial accounting:   Managerial accounting is more focused towards analyzing information and…

Q: what is Political cost hypothesis ?

A: The financial statement will be prepared by the company to know the financial position of the…

Q: . What is its present value?

A: Introduction: Compound interest can be defined as the interest on either a loan or a deposit which…

Q: In what situation should you MAKE?

A: Make or Buy: Make or Buy decision are normal condition arises in front of management due to…

Q: What is a real option? What are some types of realoptions?

A: Real options: Real options are considering as right but not obligation to take a business decision.…