Chartered Financial Analyst Level 1

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Which of the following statements about evaluating a project with a real option is most accurate?

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Last updated: December 6, 2025 at 09:45

A

The cost of the real option should be ignored as it represents a sunk cost

B

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The value of the real option less the incremental cost should be included in the project NPV

C

If the project NPV is negative before considering the real option, management should not undertake the project

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