Chapter 13 Real Options and Other Topics in Capital Budgeting Learning Objectives After reading this chapter‚ the student should be able to: Explain why conventional NPV analysis may not capture a project’s impact on the firm’s opportunities. Identify five different types of real options. Explain what an abandonment/shutdown option is‚ give an example of a project that includes this type of option‚ and explain what an option value is. Explain what a decision tree is and provide an example of
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FROM “ONION” TO “OCEAN” 71 71 Tony Fang is assistant professor of international business at Stockholm University‚ SE-106 91 Stockholm‚ Sweden (tel.: +46 8 163063; fax: +46 8 674 74 40; e-mail: tony.fang@fek.su.se). The author thanks Urapa Joy Watanachote (Thailand)‚ Joost Stel (Netherlands)‚ George Kakhadze (Georgia)‚ Satu Penttinen (Finland)‚ and Gabriel de Mello Pratellesi (Brazil) for personal communications about their respective countries discussed in this paper. The author also thanks
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As Leon Battista Alberti once said‚ “Painting is possessed of divine powered‚ for not only does it make the absent present‚ but also makes the dead almost alive”. This seems to summarize the central theme of William Butler Yeats’ poem‚ “Sailing to Byzantium” that through human imagination‚ nature and its raw materials are transformed into something that will withstand the test of time. Through the use of Yeats’ clusters of images‚ paradoxes‚ and syntax‚ this theme of endurance over time is emphasized
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Data Analysis: Graph 1 indicates the relationship between the dependent and the independent variable to be; as the concentration of sodium bicarbonate in the solution submerging the leaf discs is increased‚ the average rate of photosynthesis of the leaf discs increased in a linear trend. As it is the sodium bicarbonate which decomposes into carbon dioxide necessary for photosynthesis‚ it is reasonable to consider from Graph 1 that as carbon dioxide concentration of the solution increases‚ the rate
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Safe dance Safe dance 1. What is safe dance? A term coined to mean dance practises that are taught and performed with care as effective safe guards against potential injury. 2. What is the main way of avoiding injury? Not to side step troublesome movements but ensure that the body is sufficiently prepared to be able to handle them without injury. Overall Fitness 3. According to the article‚ what are the essential components of fitness? Balanced diet‚ adequate rest‚ gradual muscular exercise
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1.2 Basics of Functions and Their Graphs Introduction to Relations Domain and Range of a Relation Any set of ordered pairs (x‚y) is called a relation in x and y. Furthermore‚ The set of first components in the ordered pairs is called the domain of the relation. The set of second components in the ordered pairs is called the range of the relation. Definition of Function and Vertical Line Test Definition of a Function Given a relation in x and y‚ we say “y is a function of x” if for every
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What is the ’PEST + D + N ’ framework? How can this framework be used to improve marketing planning? The PEST + D + N framework is a foundation on which marketing can begin with as the parts will have an affect upon any outcomes. Political‚ economic‚ social‚ technological‚ demographic and natural environments are the influences that‚ singularly or together‚ will need to be taken into consideration when marketing a product. This is show aptly by Applbaum (1998‚ pp.324) when he states ‘The implicitly
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Presidents Franklin D. Roosevelt and Herbert C. Hoover were two very different leaders during a time of struggle in America‚ The Great Depression. They also had different ways and theories on how to get America out of it’s slump. Hoover felt that in order for the economy to get better‚ the government should not expand any more than it had to and that the people should take care of their own problems with the help of only volunteers and such‚ which was a very conservative stance. On the other hand
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Set u = 60°. y 5 kN F2 70Њ 30Њ x SOLUTION + : ©Fx = 0; O F2 sin 70° + F1 cos 60° - 5 cos 30° - 4 (7) = 0 5 5 3 4 0.9397F2 + 0.5F1 = 9.930 7 kN + c ©Fy = 0; u 3 F2 cos 70° + 5 sin 30° - F1 sin 60° - (7) = 0 5 F1 Solving: T an his th d wo sa eir is p rk w le co ro is ill o u vi pr de f a rse de ot st ny s d s ec ro p an o te y ar d le d th t o a ly by e s in f th se for Un te is ss th ite gr w in e ity o g us d S of rk ( stu e
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Chapter 13 Student: ___________________________________________________________________________ 1. As an exporter‚ according to the opening case‚ which of these is a key problem for Megahertz Communications? A. Credibility of foreign governments B. Financing C. Substandard products for foreign markets D. Language E. Country specific technical standards 2. In the United States‚ what percent of firms export‚ according to the U.S. Small Business Administration? A. Nearly 98 percent B. About 23 percent
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