Which of the Following Is Most CORRECT

Multiple Choice

Which of the following is most CORRECT?

A) Real options change the size, but not the risk, of projects' expected cash flows.
B) Real options change the risk, but not the size, of projects' expected cash flows.
C) Real options are likely to reduce the cost of capital that should be used to discount a project's expected cash flows.
D) Very few projects actually have real options.
E) Real options are less valuable when there is a lot of uncertainty about the true values future sales and costs.