The timing option that gives the option to wait: I. may be of minimal value if t

Question

The timing option that gives the option to wait:

I. may be of minimal value if the project relates to a rapidly changing technology.

II. is partially dependent upon the discount rate applied to the project being evaluated.

III. is defined as the situation where operations are shut down for a period of time.

IV. has a value equal to the net present value of the project if it is started today versus the net present value if it is started at some later date.

I and III only

II and IV only

I, II, and IV only

II, III, and IV only

I and III only

II and IV only

I, II, and IV only

II, III, and IV only

Explanation / Answer

I, II, and IV only

the above is the answer as shut down operations are not considered in the timing option

I, II, and IV only

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