Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Chapter 26, Problem 4Q
Summary Introduction

To determine: The reason that the company should accept the project if it has an option to abandon the project in future.

Introduction: The option gives an opportunity to the company to invest today and discontinue if starts earning during the definite period as per option contract.

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If a company has an option to abandon a project, would this tend to makethe company more or less likely to accept the project today?
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