02 EOC2 - Question 1 (1 point) Which of the following is...

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Question 1 (1 point) Which of the following is most correct? a. Real options change the size, but not the risk, of expected cash flows. b. Real options change the risk, but not the size, of expected cash flows. c. Real options usually change the cost of capital that should be used to discount the expected cash flows. d. Very few projects have real options. e. Real options are less valuable when the underlying source of risk is high. Question 2 (1 point) Oklahoma Instruments Oklahoma Instruments (OI) is considering a project that has an up-front cost of $250,000. The project's subsequent cash flows critically depend on whether its products become the industry standard. There is a 50 percent chance that the products will become the industry standard, in which case the project's expected cash flows will be $110,000 at the end of each of the next five years. There is a 50 percent chance that the products will not become the industry standard, in which case the project's expected cash flows will be $25,000 at the end of each of the next five years. Assume that the cost of capital is 12 percent. Refer to Oklahoma Instruments. Based on this information, what is the project's
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02 EOC2 - Question 1 (1 point) Which of the following is...

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