Which of the Following Statements Regarding Real Options Is NOT

Multiple Choice

Which of the following statements regarding real options is NOT correct?

A) Real options should only be exercised when they increase the NPV of a project.
B) Real options enhance the forecast of a project's expected future cash flows by incorporating, at the start of the project, the effect of decisions that will be made at a later date.
C) Real options give owners the right, but not the obligation, to exercise these opportunities at a later date.
D) Real options build greater flexibility into a project and thus increase its net present value (NPV) .