Example of a flexibility option

Assignment Help Financial Management
Reference no: EM13811382

Which one of the following is an example of a "flexibility" option?

a. a company has an option to invest in a project today or to wait a year.

b. a company has an option to close down an operation if it turns out to be unprofitable.

c. a company agrees to pay more to build a plant in order to be able to change the plant's input and/or outputs at a later date if conditions change

d. a company invests in a project today to gain knowledge that may enable it to expand into different markets at a later date

e. a company invests in a jet aircraft so that it's CEO, who must travel frequently, can arrive for distant meetings feeling less tired than if he had to fly commercial

Reference no: EM13811382

Questions Cloud

Identify trends in mobile software development : Identify trends in mobile software development and explain why they are relevant to the scenario described above. Explain how the different mobile platform will affect the different phases of requirements, design, development, and deployment of the m..
The cost percentage of a new common stock issue : What is the cost percentage of a new common stock issue?
Examine reliability of most popular forms of media outlets : Evaluate the reliability of the most popular forms of media outlets. Suggest two media outlets-i.e., traditional and / or social media-that you deem the most complete and trustworthy.
What are the essential claims about violent media : What are the essential claims about Violent Media? What evidence does the author offer for these claims? Next, play devil's advocate: which aspects of the essay sound wrong to you?
Example of a flexibility option : Which one of the following is an example of a "flexibility" option?
Determine the effective annual rate : Changing compounding frequency Using annual, semi annual, and quarterly compounding periods for each of the following, (1) calculate the future value if $5,000 is deposited initially, and (2) determine the effective annual rate (EAR).
What is the current share price for the soviet motor stock : Soviet Motors Co. just paid a dividend of 2.0 per share. The dividends are expected to grow at a rate of 25% for the next two years, with the growth rate falling off to a constant 7 percent thereafter. If you require a 16% returns on your investment,..
Discuss sharepoint services and various sharepoint options : Discuss SharePoint services and various SharePoint options as well as Windows Media Rights Management to handle the requirements of different enterprise scenarios, such as one that requires the use of quick collaboration and the use of video resou..
What fraction of payment made at end of second year : Your company is planning to borrow $1.5 million on a 7-year, 8%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the projects payback period

A project has an initial cost of 49,000 expected net cash inflow of 13,000 per year for eight years and a cost of capital of 12%. What is the projects payback period?

  Compare and contrast the yields and maturities

Compare and contrast the yields and maturities for each of the securities and discuss which you would hold and why relative to interest rate risk.

  Many states prohibited bank branching

Many states prohibited bank branching because of all of the following except:

  What is the yield to maturity of a zero coupon bond

What is the yield to maturity (YTM) of a zero coupon bond with a face value of $1,000, current price of $730 and maturity of 7 years? Recall that the compounding interval is 6 months and the YTM, like all interest rates, is reported on an annualized ..

  Investors believe that dividends will grow-current price

McIver, Inc. currently pays a $2 annual dividend. Investors believe that dividends will grow at 20% next year, 12% for the following year, and 6% annually thereafter. The required return is 10%. What is the current price of the stock?

  The managing investment banker is responsible for

The managing investment banker is responsible for

  Calculate the nominal annual cost of non free trade credit

Calculate the nominal annual cost of non free trade credit under each of the following terms. Assume payment is made either on the due date or on the discount date. Assume 365 days in year for your calculations.

  A project has an initial cost of 40000 expected net cash

a project has an initial cost of 40000 expected net cash inflows of 9000 per year for 7 years and a cost of capital of

  Purchasing and procurement management

Do you feel that the fixed price contract agreed to by FRC was the best way to procure ACME's computer system and where did FRC go wrong in purchasing the software system

  Briefly explain the ideas behind technical analysis

Briefly explain the ideas behind technical analysis.  In your opinion, does technical analysis have any validity in the investment world?

  Oil powered generator with a solar power generator

Georgia Power is contemplating replacing an oil powered generator with a solar power generator. The old generator was purchased 22 years ago and is being depreciated over its 25 years life to a zero salvage value using straight-line depreciation. The..

  Was this an appropriate use of taxpayer money

General Motors (GM) declared bankruptcy in 2009 after years of declining sales. The federal government 'bailed out' GM, helping GM emerge from chapter 11 in a short time. Was this the only option available to GM? Was this an appropriate use of taxpay..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd