Question

Which type of real option allows the output and/or inputs in the production process to be altered, depending on how market conditions change during a project’s life? a. Flexibility option b. Timing option c. Abandonment option

Answer 1

B

Step-by-step explanation:

Timing option makes it possible to alter inputs or outputs in production process.

Answer 2

correction option is A i.e. Flexibility option

Step-by-step explanation:

correction option is A i.e. Flexibility option

flexibility option make easier for corporation unit to decide on production or raw material on the basis of market condition.

Abandonment option - As the name indicate this option initiate when corporation suffered huge lost or when there is a conditioned of minimum cash flow due to any reason.