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Unformatted text preview: in the best interests of the shareholders. 24.2O What are the two options that many businesses have? Most businesses have the option to abandon under bad conditions and the option to expand under good conditions. n Why does a strict NPV calculation typically understate the value of a firm or a project? Virtually all projects have embedded options, which are ignored in NPV calculations and likely lead to undervaluation....
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This note was uploaded on 03/17/2009 for the course ACTSC 371 taught by Professor Wood during the Fall '08 term at Waterloo.
- Fall '08